Internal Control Questionnaires and Verification Procedures

Verification Procedures

For those significant income and expense accounts on which verification procedures have not been performed elsewhere:
1. Prepare, or have prepared, an analysis of such accounts for the period since the last examination, preferably by month, and note any unusual fluctuations for which explanations are to be obtained.
2. Obtain, by discussion with bank personnel and a review of supporting documents, explanations for those significant fluctuations and unusual items noted.
For those income accounts for which adequate explanations for fluctuations were not obtained in step 1, use appropriate sampling techniques to test as follows:
1. Select income account transactions from the initial records of accountability for testing.
2. Test the computation of the amount recorded in the initial record, and trace the transaction to any succeeding summary records and to posting in the general ledger.
3. Test additions in the general ledger account to prove its balance.
For those expense accounts for which adequate explanations for fluctuations were not obtained in step 1, use appropriate sampling techniques to test as follows:
1. Select postings from the general ledger, and simultaneously test the addition of the accounts.
2. Trace the amounts to any preceding records, and continue sampling until an individual transaction is selected.
3. Examine documentation supporting that transaction, and prove any computations reflected on the supporting document.