Congress, well aware of financial services industry problems, passed the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) to address the importance of an independent audit committee of the board. The subsequent rules are not the same for all institutions; although primarily based on total assets size, the examination ratings of larger institutions (more than $5 billion total assets) may also play a major role in audit committee structure. In this concise overview of the requirements, insights are shared not only on the basic requirements, but also specific questions to consider when assessing independence of a director to potentially serve on the audit committee. Summary reminders provide important guidance for assessing current directors as well as future audit committee selections.
- Audit Committee Basics
- FDICIA Guidelines for Audit Committee Membership
- Ascertaining Sufficient Independence to Serve on Committee
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