Must a System institution’s audit committee pre-approve all nonaudit services or just those performed by the external auditor engaged to conduct the financial statement audit?
An institution’s audit committee only needs to pre-approve nonaudit services when those services are performed by an external auditor engaged to conduct an institution’s audit. Please keep in mind, however, that § 621.31(a) prohibits external auditors engaged to conduct an institution’s audit from performing certain nonaudit services. FCA’s regulations do not limit the types of nonaudit services or require audit committee approval of nonaudit services that may be performed by consultants or qualified public accountants not engaged to conduct the institution’s financial statement audit. We encourage System banks and associations to develop policies and procedures governing the pre-approval of the external auditor to perform both audit and permissible nonaudit services.
Related Questions
- Must a System institution’s audit committee pre-approve all nonaudit services or just those performed by the external auditor engaged to conduct the financial statement audit?
- Does the audit committee supervise the institutions internal auditor, and is the internal auditor subject to removal by the audit committee?
- Must System institutions disclose in their annual reports the fees paid to the external auditor for both audit and nonaudit services?
