Bank Regulation:

Information on Independent Public Accountant Audits of Financial Institutions

GGD-86-44FS: Published: Apr 21, 1986. Publicly Released: Apr 21, 1986.

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In response to a congressional request, GAO reported on its study of six failed and open financial institutions that had undergone independent audits to determine if a workable methodology could be devised for analyzing the audit work done at a statistically valid sample of financial institutions.

In order for financial information about a bank or any other economic entity to be useful, the information must be collected, aggregated, and reported according to a set of rules that is consistently applied and accessible to users of the information. GAO found that: (1) the Federal Home Loan Bank Board, Federal Deposit Insurance Corporation, Federal Reserve System, and Office of the Comptroller of the Currency require special-purpose financial statements from the financial institutions they regulate; and (2) each of the four agencies, while requiring that regulated entities follow generally accepted accounting principles (GAAP), has set forth a small number of reporting rules and regulations which are sometimes referred to as regulatory accounting procedures or regulatory accounting principles (RAP) which sometimes depart from GAAP. GAO also found that RAP may deviate from GAAP when: (1) accounting methods are specified contrary to GAAP; and (2) the accounting treatment is restricted to one or more particular GAAP methods.

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  • finance icon, source: Comstock

    Priority Open Recommendations:

    Department of the Treasury
    GAO-20-549PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

Apr 27, 2020

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