Internal Control Questionnaires and Verification Procedures

Records

1. Is the preparation and posting of subsidiary guarantee records performed or reviewed by persons who do not also:

   1. Issue official checks or drafts singly?

   2. Handle cash?

2. Are the subsidiary guarantees issued records balanced daily with the general ledger and are reconciling items and adequately investigated by persons who do not normally handle guarantees?

3. Are guarantee delinquencies prepared for and reviewed by management on a timely basis?

4. Are inquiries regarding guarantee balances received and investigated by persons who do not normally handle guarantees or post records?

5. Are bookkeeping adjustments checked and approved by an appropriate officer?

6. Is a daily record maintained summarizing guarantee transaction details, i.e., guarantees issued, guarantees canceled or renewed, payment made under guarantees, and fees collected, which supports general ledger entries?

7. Are frequent guarantee instrument and liability ledger trial balances prepared, and are they reconciled monthly with control accounts by persons who do not process or record guarantee transactions?

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