Banks features, Auditing

Assignment Help:

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.


Related Discussions:- Banks features

The accounting system, The Accounting System ISA 400 Risk Assessment an...

The Accounting System ISA 400 Risk Assessment and Internal Control accounting system are the sequence of tasks and records of an entity by which transactions are procedure as a

Historic costs methods - long term contracts, Historic Costs Methods - Long...

Historic Costs Methods - Long Term Contracts You will notice such this exercise is completely dependent on the company estimating its further costs.  This is wherever the audi

Fairness - auditing, Fairness -  Auditing The word fair can have the ...

Fairness -  Auditing The word fair can have the following meanings:  on the other hand clear, plain and distinct and on the one impartial, equitable and simple.  When fair is

Goodwill, How would you value the Goodwill

How would you value the Goodwill

Internal control, Ask question #MA. Evaluate the strengths and weaknesses o...

Ask question #MA. Evaluate the strengths and weaknesses of preview Company''s control environment B. What factors in Preview company''s control environment have led to and facilit

AGENCY THEORY, The agency relationship between absentee owners and managers...

The agency relationship between absentee owners and managers produce a natural conflict of interest.what does it mean?

Related party transactions, Related Party Transactions Related party t...

Related Party Transactions Related party transactions-a transfer of obligations or resources among related parties, regardless of whereas a price is charged. A party is rel

Balance sheet and income statement, OBJECTIVES To apply certain st...

OBJECTIVES To apply certain steps in the audit planning process, with emphasis on risk identification and audit response (strategy) thereto. To provide you with the exp

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd