With respect to this quality assurance process, the Federal Reserve conducted reviews of the documentation and support for management's assessment of internal controls and the auditor's related attestations at a few problem institutions that are subject to section 112 of the Federal Deposit Insurance Corporation Improvement Act.
What we found was evidence that notable deficiencies had crept into the quality of the work performed by management over time as the businesses grew and new products were added. Management became less vigilant in the internal control area because of increased performance pressures. This behavior is actually counterintuitive when dealing with internal controls.