Does your firm audit depository institutions insured by the Federal Deposit Insurance Corporation (FDIC) - especially those nearing or at the $500M in assets threshold? If so, you need to know the independence requirements that apply to those engagements under Section 36 of the Federal Deposit Insurance Act (FDI Act). You should also be aware of FDIC policies that apply to all FDIC-insured depository institutions (IDIs).
Click here to read my article, which overviews the requirements and where firms have struggled. Though written in 2018, the rules are unchanged and more relevant than ever as the value of deposits held by a shrinking number of IDIs' puts more and more banks over the $500M threshold.
And be aware that firms performing certain nonaudit services (e.g., bookkeeping or financial statement preparation) for their audit clients before the client's consolidated total assets reach $500M as of the beginning of its fiscal year can find themselves in violation of the independence rules of the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB). This is because once that threshold is reached, firms must be SEC/PCAOB independent for all years included in the comparative financial statements required by Part 363.
