Internal Control Questionnaires and Verification Procedures

Verification Procedures

1. Test footings to the trial balance

2. Using appropriate sampling techniques, select loans from the trial balance, and:

   1. Prepare and mail confirmation forms to borrowers (confirm balances as of the last billing date).

   2. After a reasonable time period, mail second requests.

   3. Follow up on any no-replies or exceptions and resolve differences.

   4. Check calculations of service and interest charges included in last billing.

3. If the bank maintains an inventory of unissued credit cards:

   1. Using statistical techniques, select batches or areas to be counted.

   2. Count batches or areas selected and agree to appropriate inventory total.

   3. Add the totals for each batch or area and agree to inventory control total.

   4. Investigate discrepancies.

4. Obtain or prepare a schedule showing monthly income from service charges and interest charges, and the credit card loan balance at the end of each month since the preceding examination and investigate significant fluctuations and/or trends.

Previous: Conclusion Next: Due From Banks — Domestic and International