There has been some discussion in my bank about outsourcing the audit function for both compliance and safety & soundness. We are approaching $1 billion in assets.

I'm curious as to how many banks have taken this avenue, and why. What has your experience been? If you knew then what you know now, would you make the same decision?

Thanks for your input.

Many smaller institutions outsource both internal and compliance audits and find it cost effective versus trying to find, retain and train staff internally to perform the functions and also keep that staff independent from the areas being audited.

At $1B, this avenue is still probably just as cost effective in some areas, however you still will need someone on board to manage your FDICIA internal control assessment process. While some firms claim they can handle this for you, even I who has been doing this type of work for years, would not be comfortable relying on the entire process being outsourced.

We are at $600 million and we outsource both compliance and S&S audits. We done this for years. We also do our own internal risk assessment on a strict schedule that includes every department and department manager and also includes board reporting.

I agree with rlcarey on the FDICIA control monitoring and testing.