Internal Control Questionnaires and Verification Procedures

General

1. Does the bank have a budget? If so:

   1. Is it reviewed and approved by managerial personnel and/or the board of directors?

   2. Is it periodically reviewed and updated for changed conditions?

   3. Are periodic statements compared to budget, and does management review explanations of variances?

   4. Does the manager of each department or division prepare a separate budget?

2. Does the bank’s accounting system provide sufficiently detailed breakdowns of accounts to enable it to analyze fluctuations?

3. Does someone who does not have access to cash maintain the general books of the bank?

4. Are all general ledger entries processed through the proof department?

5. Does a general ledger ticket support all entries to the general ledger?

6. Do general ledger tickets, both debit and credit, bear complete approvals, descriptions, and an indication of the offset?

7. Does a responsible person other than the general ledger bookkeeper or person associated with its preparation approve all general ledger entries?

8. Is the general ledger posted daily?

9. Is a daily statement of condition prepared?

10. Are corrections to ledgers made by posting a correcting entry and not by erasing (manual system) or deleting (computerized system) the incorrect entry?

11. Are supporting work sheets or other records maintained on accrued expenses and taxes?

12. Are those supporting records periodically reconciled with the appropriate general ledger controls?

13. Are any accounts payable maintained on the accrual basis of accounting?

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