Internal Control Questionnaires and Verification Procedures

International Time Deposits

1. Test the additions of the trial balances and the reconciliation of the trial balances to the general ledger.

2. Using appropriate sampling techniques, select due from bank — time deposits, and:

   1. Prepare and mail confirmations to bank customers selected. (Confirmation forms should be done in the name of the bank, on its letterhead, and returned to its auditing department with a code designed to direct such confirmations to the examiners. Confirmation forms should include name of bank, amount, currency, inception and value dates, maturity, and interest rate.)

   2. After a reasonable time, mail second requests.

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

   4. Examine due from bank time contracts for completeness and agree dates, amount, and interest rate to trial balance.

   5. Check to see that the required authorized signature of an approving officer is on the contract.

   6. Check to see that the contract appears to be genuine.

   7. List all documentation discrepancies, and investigate.

   8. Review customer ledgers and authorizations, and determine if authorizations are signed in accordance with terms of the due from bank — time agreements.

3. Review the accrued interest accounts by:

   1. Reviewing and testing procedures for accounting for accrued interest and for handling adjustments.

   2. Scanning accrued interest for any unusual entries and following up on any unusual items by tracing them to initial and supporting records.

4. Obtain or prepare a schedule showing the accrued interest balances and the deposit balances for selected time periods since last examination:

   1. Calculate rations.

   2. Investigate significant fluctuations and/or trends.

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