Internal Control Questionnaires and Verification Procedures

Records

1. Is the preparation and posting of subsidiary bankers’ acceptance records performed or reviewed by persons who do not also:

   1. Issue official checks or drafts singly?

   2. Handle cash?

2. Are the subsidiary bankers’ acceptance records balanced daily with the appropriate general ledger accounts and reconciling items adequately investigated by persons who do not normally handle acceptances and post records?

3. Are acceptance delinquencies prepared for and reviewed by management on a timely basis?

4. Are inquiries about acceptance balances received and investigated by persons who do not normally handle settlements or post records?

5. Are acceptance delinquencies prepared for and reviewed by management on a timely basis?

6. Are inquiries about acceptance balances received and investigated by persons who do not normally handle settlements or post records?

7. Are bookkeeping adjustments checked and approved by an appropriate officer?

8. Is a daily record maintained summarizing acceptance transaction details, i.e., bankers’ acceptances created, payments received, and fees collected to support applicable general ledger account entries?

9. Are acceptances of other banks that have been purchased in the open market segregated on the bank’s records from the bank’s own acceptances created?

10. Are prepayments (anticipations) on outstanding bankers’ acceptances netted against the appropriate asset account “Customer Liability for Acceptances” (or loans and discounts, depending upon whether or not the bank has discounted its own acceptance), and do they continue to be shown as a bank liability — “Acceptances Executed”?

11. Are bankers’ acceptance record copy and liability ledger trial balances prepared and reconciled monthly with control accounts by employees who do not process or record acceptance transactions?

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