January 1, 2007
Suspicious Activity Report (SAR) Revised To Support Joint Filing and Reduce Duplicate SARs
In a press release, the Financial Crimes Enforcement Network (FinCEN) and the federal banking agencies announced that the format for the Suspicious Activity Report by Depository Institutions (SAR-DI) has been revised to support a new joint filing initiative, which will reduce the number of duplicate SARs filed for a single suspicious transaction. Though available now, the final approved form should not be filed until the effective implementation date of June 30, 2007.
Agencies Issue Revised Consumer Handbook on Adjustable Rate Mortgages
In a press release, the Board and the Office of Thrift Supervision (OTS) announced the availability of a revised Consumer Handbook on Adjustable-Rate Mortgages (the CHARM booklet), which provides information to consumers about the features and risks of such loans. In recognition of the growing use of nontraditional mortgage products that allow borrowers to defer payment of principal and sometimes interest, the agencies have substantially revised the CHARM booklet to include discussions about "interest-only" and "payment option" mortgages.
Accounting Board Proposes New Financial Auditing Standard
The Public Company Accounting Oversight Board (PCAOB) on Dec. 19 proposed a new auditing standard for internal control over financial reporting under the Sarbanes-Oxley Act. If adopted by the PCAOB and approved by the Securities and Exchange Commission (SEC), it would replace Auditing Standard No. 2. SEC Chairman Christopher Cox called the new plan a positive step to repeal "the unduly expensive and inefficient auditing standard." Some of the provisions of the proposal include: directing auditors to the most important controls and emphasizing the importance of risk assessment; revising the definitions of significant deficiency and material weakness, as well as the "strong indicators" of a material weakness; removing the requirement to evaluate management's process; allowing consideration of knowledge from previous audits; directing auditors to tailor audits for smaller, less complex firms; and changing the focus on multi-location testing requirements on risk rather than coverage. The comment deadline is Feb. 26.