Banks features, Auditing

Banks Features

(a) Profit and loss account:
When looking at a bank's profit and loss account the accountant should seek to discover what proportions of the bank's profits are derived from sustainable business and how much comes from sources of income that are speculative or uncertain. The three major sources of income that require examination are: the net interest between lending and borrowing, dealing profits derived from the banks investments portfolio and fees and commissions.

(b) Current status:
Although he may be auditing a prior period the auditor should discuss with the management any current problems to discover whether profits are still being made in the current trading period.

(c) Review of projected profits:
Enquiries should be made to ascertain whether projected profits take into account suspended interest, bad debts provision and any other decline in the realisable value of assets.

(d) Frequency of reviews:
The auditor should enquire whether provisions are being reviewed on a regular basis.

(e) Further enquiries:
Further enquiries are made in the following areas: investments, certificates of deposits, foreign exchange, land and property and loans. The fee earning activities of the bank are also investigated in the areas of loan commitment, acceptances, portfolio management and corporate advisory work.

Posted Date: 12/4/2012 5:27:59 AM | Location : United States







Related Discussions:- Banks features, Assignment Help, Ask Question on Banks features, Get Answer, Expert's Help, Banks features Discussions

Write discussion on Banks features
Your posts are moderated
Related Questions
audit procedure for shares or common stock

Judgmental Sampling The Judgement sampling is where, auditor using his own experience and awareness of the client's business and situations selects the sample to be tested with

Q. Which of the following statements is not considered a disadvantage of the corporate form of organization? a. Additional taxes b. Government regulations c. Limited liability of s

Motor Vehicles - Audit Process Similar considerations govern the audit of motor vehicles as to those relating to machinery and plant.  The simply matter of consideration now i

Action if Management Refuses to Provide Representations If management refuses to provide a representation that the auditor considers essential, this constitutes a scope restric

Documentation of Representations by Management The auditor would ordinarily involve in audit working papers evidence of management's representations in form of a summary of or

Definition of Auditing According to International Standard on Auditing (ISA) objective and common principles governing an audit of financial statements, the purpose of a financ

Common stock valuation 1. Features of common stock (You may review common stock learned from TCA 221) a. Residual claim on income and assets (after debt holders and preferre

Disclosures about Inventories - IAS 2 IAS 2 specifies disclosures about inventories. In a large manufacturing company, no article in the balance sheet appears verification

Problem : As per the Field Standard (INTOSAI), competent, relevant and reasonable evidence should be obtained to support the auditor judgement and conclusions regarding the org