Washington (Aug. 11, 2003) – U.S. banking regulators issues final rules Friday for suspending or barring accounting firms from working for large banks if they violate professional standards, or are deemed negligent in their work.

The final rules, which become effective on Oct. 1, establishes procedures agencies can go through to bar accounting firms from performing audit and attestation services for banks with assets of $500 million or more.

“The rules provide that certain violations of law, negligent conduct, reckless violations of professional standards or lack of qualifications to perform auditing services may be considered good cause to remove, suspend or bar an accountant or firm from providing audit services for banking organizations,” the Federal Reserve noted in a joint press release with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The rules also prohibit firms from performing such work if the firm has been removed or debarred by one of the agencies, or if the SEC or the accounting oversight board has taken certain disciplinary actions against the accountant or the firm.

-- WebCPA staff

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