My Audit Committee has requested that I get new proposals and risk ratings from a couple of other firms. We have been using the same firm for 2 years now and have received good results from our examiners. Is there somewhere that states that audit firms should be reviewed for due diligence every so often? We are considered a samll bank.

Assuming you are privately held, there is no requirement to change audit firms. In fact, you may find it cost prohibitive jumping firms every few years. Sarbanes-Oxley recommends a review and a change in the audit partner every 10 years (I believe, can't check since I am at home). We require a change in audit partners and the audit manager every 5 years.

Changing external auditors frequently is a red flag to outsiders and many times indicates disagreements between the two parties. You might suggest that the audit partner / manager be rotated periodically (every 4-5 years) just to keep the auditors from becomming complacent and the audits stale. I have seen that first hand. Fresh eyes add value. Don't change too frequently, however, or you will spend too much time "training" the new person.

It is also a good idea to use an auditor that does a significant number of other banks...this gives them insight that can perhaps add value to you.

Thank you both very much for your thougts