Exception reports generated by the lending institution are designed to identify past-due loans. Auditors should review these exception reports to identify an unusually high number of exceptions and old or unusual exceptions that might indicate that:
Answer(s): A
Financial institutions regularly identify uncollectible and charge them off against the reserve for loan losses. Auditors should ensure that the institution has developed adequate criteria for charge-offs and select a sample of charged-off loans whether they are handled properly.Another useful test is:
Deposit accounts are either interest bearing or non-interest bearing. Interest bearing accounts includes and . The types of accounts bear interest for a fixed period of time and are known as time deposits.
In the United States, banks are required to report cash deposits that exceed $10, 000 a day to any one account, regardless of how many branches or deposits have been used in the transactions. Banks are also required to report when cash is used to purchase cashier's checks, money orders, traveler's checks, or bank checks in excess of $3000. In the Untied States, accounts are federally insured by the Federal Deposit Insurance Corporations (FDIC). An individual is limited to in insurance coverage at each bank (including branches).
Answer(s): C
The financial institutions' general ledger records activity on deposit accounts. Posting of time deposit transactions usually occurs on the day transaction occurs or the next day. The following audit objectives and steps should be considered when performing an audit of deposit accounts EXCEPT:
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