Internal Control Questionnaires and Verification Procedures

Other

1. Are the preparation, additions, and posting of subsidiary records performed and/or adequately reviewed by persons who do not also have sole custody of securities?

2. Are subsidiary records reconciled, at least monthly, to the appropriate general ledger accounts and are reconciling items adequately investigated by persons who do not also have sole custody of securities?

3. Are fails to receive and deliver under a separate general ledger control?

   1. Are fail accounts periodically reconciled to the general ledger and any differences followed up to a conclusion?

   2. Are periodic aging schedules prepared (if so, indicate schedule frequency )?

   3. Are stale fail items confirmed and followed up to a conclusion?

   4. Are stale items valued periodically and, if any potential loss is indicated, is a particular effort made to clear such items or to protect the bank from loss by other means?

4. With respect to securities loaned and borrowed positions:

   1. Are details periodically reconciled to the general ledger, and any differences followed up to a conclusion?

   2. Are positions confirmed periodically (if so, indicate frequency on confirmation )?

5. Is the compensation of all department employees limited to salary and a non-departmentalized bonus or incentive plan?

   1. Are sales representatives’ incentive programs based on sales volume or sales profit, and not department income?

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