Internal Control Questionnaires and Verification Procedures

Introduction

Evaluating a bank’s system of internal controls is a fundamental step in the OCC’s supervision process. This booklet contains a compilation of OCC Internal Control Questionnaires (ICQs) and verification procedures from the Comptroller’s Handbook for National Bank Examiners and booklets of the Comptroller’s Handbook that were published prior to January 2001. Booklets that were published after that time contain ICQs and verification procedures, either separately identified or incorporated into the examination procedures.

The decision to complete ICQs or perform verification procedures is made either during pre-examination planning or after reviewing the findings and conclusions of core assessments. ICQs are procedures that assist examiners in better understanding the quality of a bank’s risk controls and in assessing compliance with bank policy for each area under examination. ICQs typically address standard controls that provide day-to-day protection of bank assets and financial records. Verification procedures are designed to verify the existence of assets or liabilities, or test the reliability of financial records. While verification procedures typically are performed by bank staff, directors, or auditors, examiners themselves must be prepared to perform verification procedures in cases where substantive safety and soundness concerns are unresolved.

The following procedures summarize the general decision-making process used when expanding the scope of examination, including the use of ICQs and verification procedures.

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