Myth 4: The Federal Reserve is not audited
This matter is a little easier to define since it is a matter of public record.
For this one, we turn to William Ford, a former president of the Federal Reserve Bank of Atlanta. Ford says the Fed's Board of Governors is subject to an audit every year by the account services firm Deloitte Touche Tohmatsu Ltd. using generally accepted accounting principles, or GAAP.
Where it gets a bit murkier is that the 12 Federal Reserve District Banks are not audited using the same GAAP standards, according to Ford. "They don't use the rules they enforce on banks," he says.
Horwitz suggests more could be done. "It is not audited in the way many critics would like, with a full accounting of its holdings, and especially what it has done since 2007," Horwitz says. He says the Fed "publishes information on its balance sheet, and that info is a key part of monetary policy. However, it is true that it's never undergone a complete audit comparable to what a private-sector firm might."
Legislation has been proposed in Congress and has been advocated by Sen. Rand Paul, R-Ky., to perform a fuller audit of the Federal Reserve's activities.