Internal Control Questionnaires and Verification Procedures

Allowance Evaluation Process

1. Does the bank have a written description of the process and methodology used by management to determine the adequacy of the allowance?

2. Does management review the adequacy of the allowance and make necessary adjustments at least quarterly and report the findings to the board of directors before preparing the report of condition and income?

3. Does management retain documentation of its review of the adequacy of the allowance?

Previous: Loan Charge-offs Next: Conclusion