Internal Control Questionnaires and Verification Procedures

Capital Stock

1. If the bank has an outside transfer agent and/or registrar:

   1. Request confirmation from transfer agent of total shares issued.

   2. Request confirmation from registrar of the total shares authorized and total shares issued.

   3. Check information confirmed by transfer agent and registrar.

2. If the bank acts as its own transfer agent and/or registrar:

   1. Verify outstanding stock by reference to open stubs in stock certificate book.

   2. Obtain or prepare a working paper listing transactions since the preceding examination to include new shareholder’s name, number of shares, and certificate number offsetting with prior shareholder’s name(s), number of shares surrendered, and certificate number(s).

   3. Account for all unissued stock certificates.

   4. Ascertain that surrendered, misprinted, and mutilated certificates have been effectively canceled and accounted for.

3. Total stockholder ledgers, and reconcile total par value of each class of stock issued and outstanding to the analysis obtained in step 1 and to the appropriate general ledger control accounts.

4. For capital changes since the previous examination:

   1. Reconcile the proceeds of capital stock sold to investment bankers’ statements, prospectuses, option agreements, etc., and trace credit to the general ledger.

   2. Check disbursements (payments to underwriters, etc.) in connection with the stock sale to contracts, official approvals, or invoices.

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