Internal Control Questionnaires and Verification Procedures

Records

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

   1. Issue official checks or drafts singly?

   2. Handle cash?

2. Are the subsidiary letter of credit records (control totals) balanced daily with the appropriate general ledger accounts and reconciling items adequately investigated by persons who do not normally handle letters of credit and post records?

3. Are delinquencies arising from the non-payment of instruments relating to letters of credit prepared for and reviewed by management on a timely basis?

4. Are inquiries regarding letter of credit balances received and investigated by persons who do not normally process documents, handle settlements, or post records?

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

6. Is a daily record maintained summarizing letter of credit transaction details, i.e., letters of credit issued, payments received, and commissions and fees collected, to support applicable general ledger account entries?

7. Are frequent letter of credit record copy and liability ledger trial balances prepared and reconciled monthly with control accounts by employees who do not process or record letter of credit transactions?

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