Internal Control Questionnaires and Verification Procedures

Records

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

   1. Issue official checks or drafts singly?

   2. Handle cash?

2. Are the subsidiary commercial loan records reconciled daily with the appropriate general ledger accounts, and are reconciling items investigated by persons who do not also handle cash?

3. Are delinquent account collection requests and past due notices checked to the trial balances that are used in reconciling commercial loan subsidiary records with general ledger accounts, and are they handled only by persons who do not also handle cash?

4. Are inquiries about loan balances received and investigated by persons who do not also handle cash?

5. Are documents supporting recorded credit adjustments checked or tested subsequently by persons who do not also handle cash (if so, explain briefly)?

6. Is a daily record maintained summarizing note transaction details, i.e., loans made, payments received, and interest collected, to support applicable general ledger account entries?

7. Are frequent note and liability ledger trial balances prepared and reconciled with controlling accounts by employees who do not process or record loan transactions?

8. Is an overdue account report generated frequently (if so, how provide frequency )?

9. Are subsidiary payment records and files pertaining to serviced loans segregated and identifiable?

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