Internal Control Questionnaires and Verification Procedures

Confirmations

  1. Is there a designated “confirmation clerk” within the accounting section of the division or branch?

    1. Incoming Confirmations:

      • Are incoming confirmations delivered directly to the confirmation clerk and not to trading personnel?

      • Are signatures on incoming confirmations verified with signature cards for:

        • Authenticity?

        • Compliance with advised signatory authorizations of the counterparty?

      • Are all data on each incoming confirmation verified with file copies of contracts to include:

        • Name?

        • Currency denomination and amount?

        • Rate?

        • Transaction date?

        • Preparation date if different from transaction date?

        • Maturity date?

        • Delivery instructions, if applicable?

      • Are discrepancies directed to an officer apart from the trading function for resolution?

      • Is a confirmation discrepancy log or other record maintained to reflect the identity and disposition of each discrepancy?

      • Are telex tapes retained for at least 90 days as ready reference to rates and delivery instructions?

    2. Outgoing Confirmations:

      • Are outgoing confirmations mailed/telexed on the day during which each trade is effected?

      • Are outgoing confirmations addressed to the attention of persons other than trading personnel at counterparty locations?

      • Does the accounting and/or filing system adequately segregate and/or identify booked contracts for which no incoming confirmations have been received?

      • Are follow-up confirmations sent by the confirmation clerk if no corresponding, incoming confirmation is received within a limited number of days after the contract is effected (if so, specify )?

      • Is involvement by the auditing department required if no confirmation is received within a limited number of days after the transmittal of the second request referred to above (if so, specify )?

      • Are confirmation forms sent in duplicate to customers who do not normally confirm?

      • Are return copies required to be signed?

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