Highlights:

• Part 363 of the FDIC's regulations requires assessments of internal control over financial reporting by both management and independent auditors for insured institutions with $1 billion or more in total assets.
• Section 404 of the Sarbanes-Oxley Act imposes similar internal control requirements on public companies. On May 24, 2007, the Public Company Accounting Oversight Board (PCAOB) adopted Auditing Standard No. 5 (AS 5).
• Generally, auditors of public institutions that are accelerated filers will follow AS 5 for Section 404 purposes for fiscal years ending on or after November 15, 2007.
• Generally, auditors of public institutions that are non- accelerated filers will follow AS 5 for Section 404 purposes for fiscal years ending on or after December 15, 2008.
• In response to questions it has received, the FDIC has determined that auditors' internal control reports issued under AS 5 satisfy the requirements of Part 363.
• For non-public institutions, auditors may follow the American Institute of Certified Public Accountants' (AICPA) attestation standards, known as "AT 501," when reporting on internal controls.
• Auditors of public institutions that are non-accelerated filers need only follow AT 501 to satisfy Part 363 until AS 5 takes effect for non-accelerated filers in 2008.
• For Part 363 purposes, the scope of financial reporting includes financial statements prepared for regulatory reporting.

Distribution:
FDIC-Insured Institutions With $500 Million or More
in Assets

Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Board of Directors
Audit Committee

Related Topics:
Federal Deposit Insurance Act Section 36
Part 363 of the FDIC's Regulations

Attachment:
Guidance on Part 363 Internal Control Attestation Standards for Independent Accountants
Guidance on Part 363 Internal Control Attestation Standards for Independent Accountants - PDF (PDF Help)

Contact:
FDIC Regional Accountant or Harrison Greene,
Senior Policy Analyst, Division of Supervision and
Consumer Protection, on 202-898-8905 or
hgreene@fdic.gov

Printable Format:
FIL-5-2008 - PDF (PDF Help)

Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2008/index.html.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562- 2200).