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Cash Accounts: Domestic and International Examination Objectives

Section 201.2

1. To determine if the policies, practices, proce

4. To determine compliance with laws, rulings and

regulations. 5. To initiate corrective action when policies, prac.

tices, procedures or internal controls are deficient or when violations of law, rulings or regulations have been noted.

dures and internal controls regarding "cash ac

counts" are adequate. 2. To determine if bank officers and employees are

operating in conformance with the established

guidelines. 3. To determine the scope and adequacy of the au

dit function.

Comptroller's Handbook for Nauonal Bank Examiners
August 1991

Cash Accounts: Domestic and International Examination Procedures

Section 201.3

1. Complete or update the Cash Accounts section

of the Internal Control Questionnaire. 2. Based on the evaluation of internal controls

and the work performed by internal/external auditors (see separate program), determine the

scope of the examination. 3. Test for compliance with policies, practices,

procedures and internal controls in conjunction with performing the remaining examination procedures. Also obtain a listing of any deficiencies noted in the latest review done by internal/external audit from the examiner assigned to that area of examination, and determine if ap

propriate corrections have been made. 4. Perform those verification procedures deemed

appropriate. 5. Scan the general ledger cast, accounts for any

unusual items or abnormal fluctuations. Investigate any such items and document any apparent noncompliance with policies, practices and procedures for later review with appropriate

management personnel. 6. Obtain teller settlement sheet recap or similar

document as of the examination date and agree to the general ledger. Scan for reason

ableness and conformity to bank policy. 7. Obtain detailed listings of cash items, including

any bank items which are carried in the general ledger under "other assets". agree listings to general ledger balances and scan for propriety

and conformity to bank policy 8. Test compliance with 12 CFR 21 by: a. Selecting teller and banking office cash bal

ance sheets and determining that balances

are within currency limits established. 6. Selecting bait money and agreeing serial

numbers to applicable records. c. Reviewing documentation evidencing train

ing sessions held since the preceding exam.

ination. d. Performing any visual inspections deemed

appropriale. e. Analyzing the bank's system of security and

protection against external crimes. Guidance for this analysis is offered in the Appendix to this handbook.

f. Determining. through discreet corroborative

inquiry of responsible bank officials and review of documentation, whether a security program that equals 'or exceeds the standards prescribed by 12 CFR 21.4 is in effect and that the annual compliance report and any other reports requested by the OCC

have been filed. 9. Review compliance with the financial Record

keeping and Reporting of Currency and Foreign Transactions ACLCER 102 103.23, 103.33 and 103.34 by:

a. Reviewing the Audit Function Questionnaire X and the International Supplement in the In

ternal and External Audits program to determine if the internal auditor is checking procedures for compliance with the Act. (If the bank does not have an internal audit function, ascertain that a program of management reviews or self audits has been established which encompasses the requirements

of the regulation.) xo. Reviewing the file of reports submitted

(forms 4789 and 4790) and ascertaining that
they are properly completed and filed as re-
quired by the regulation and bank policy.
Reviewing the bank's list of exempt custom-
ers to determine that:

Its contents conform to the requirements
of the regulation (103.22(e)) and that the
exemptions appear reasonable.
The bank has, in granting exemptions,

adhered to its established policy.
d. Interviewing operations personnel (tellers,

platform officers, selected branch manag. ers, and international division management) 10 ascertain whether they are sufficiently knowledgeable concerning the regulation and operating procedures to assure compliance. (In those instances where a branch visitation is impractical, selected branch

managers may be contacted by telephone.) Xe.

Reviewing the totals of cash shipped 10 and/ or received from the Federal Reserve Bank (reported on Form MD-115) or correspondent bank during the last six months. d any amount appears hich relative to the amount

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Comptroller's Handbook for Nationai Bank Examiners February 9E2

Cash Accounts: Domestic and International
Examination Procedures

Section 201.3

x

1

the bank has reponed on Form 4789 for the last six months, discuss the findings with

mananement. 1. Meeting with a senior official or compliance

officer and submitting to either of them the Financial Recordkeeping and Reporting of Currency and Foreign Transactions (Form CC 1425-CL) for completion and signature. Explain all "no" answers. Correlate work performed in other areas of examination interest and forward the checklist to the regional office with the examination report, explaining any reported "no" answers. In the absence of any "no" answers retain the

checklist in the work papers. g. Based on the results of step. I, and on an

evaluation of the bank's policies and procedures, determine if appropriate operating and auditing standards are in place and document the conclusion in the work papers. If appropriate standards are not in place, perform those verification procedures

dealing with compliance with 31 CFR 103. 10. Review tellers' over and shon accounts for re

curring patterns and any large or unusual items and foilow up as considered necessary. Investigate differences centered in any one teller or banking office. Determine whether corrective

action has been taken, it required. 11. Determine, by discreet corroborative inquiry of

responsible bank officials and review of documentation, whether detalcations and/or mysterious disappearances of cash since the preceding examination have been properly reported pursuant to interpretive Ruling 7.5225 in the Comptroller's Manual For National Banks.

12. Review foreign currency control ledgers and

dollar book value equivalents for.
a. Accuracy of calculations and booking proce-

dures.
b. Unusual fluctuations.
c. Concentrations.

d. Unusual items. 13. Review international division revaluation calcu

lations and procedures if performed by cash account operations staff. (The bank's accounting/auditing department may revalue cash accounts together with other foreign currency led

ger and future exchange accounts.) 14. Review the following items with appropriate

management personnel (or prepare a memo to
other examining personnel for their use in re-
viewing with management):
a. Internal control exceptions and deficiencies

in, or noncompliance with, written policies,

practices and procedures. b. Uncorrected audit deficiencies. c. Violations of law. d. Inaccurate booking of U.S. dollar book value

equivalents for foreign currencies. e. Inaccurate revaluation calculations and pro

cedures pertormed by cash account opera

tions statt. 15. Prepare comments on deficiences or violations

of law noted above for inclusion in the exami

nation report. 16. Prepare a memorandum and update work pro

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gram with any information which will facilitate future examinations.

Comptroller's Handbook for National Bank Examiners

Fooruary 1982

Cash Accounts: Domestic and International Examination Procedures

Section 201.3

1. Complete or update the Cash Accounts section

of the Internal Control Questionnaire. 2. Based on the evaluation of internal controls

and the work performed by internal/external auditors (see separate program), determine the

scope of the examination. 3. Test for compliance with policies, practices,

procedures and internal controls in conjunction with performing the remaining examination procedures. Also obtain a listing of any deficiencies noted in the latest review done by internal/external audit from the examiner assigned to that area of examination, and determine if ap

propriate corrections have been made. 4. Perform those verification procedures deemed

appropriate. 5. Scan the general ledger cash accounts for any

unusual items or abnormal fluctuations. Investigale any such items and document any apparent noncompliance with policies, practices and procedures for later review with appropriate

management personnel. 6. Obtain teller settlement sheet recap or similar

document as of the examination date and agree to the general ledger. Scan for reason

ableness and conformity to bank policy. 7. Obtain delailed listings of cash items, including

any bank items which are carried in the general ledger under "other assets", agree listings 10 general ledger balances and scan for propriety

and conformity to bank policy. 8. Test compliance with 12 CFR 21 by: a. Selecting teller and banking office cash bal.

ance sheets and determining that balances

are within currency limits established. 6. Selecting bait money and agreeing serial

numbers to applicable records. C. Reviewing documentation evidencing train.

ing sessions held since the preceding exam.

ination. d. Performing any visual inspections deemed

f. Determining, through discreet corroborative

inquiry of responsible bank officials and review of documentation, whether a security program that equals or exceeds the standards prescribed by 12 CFR 21.4 is in ettect and that the annual compliance report and any other reports requested by the OCC

have been filed. 9. Review compliance with the Financial Record

keeping and Reporting of Currency and Foreign Transactions Act, 31 CFR 103.22, 103.23. 103.33 and 103.34 by: a. Reviewing the Audit Function Questionnaire

and the International Supplement in the internal and External Audits program to deter. mine if the internal auditor is checking procedures for compliance with the Act. (If the bank does not have an internal audit function, ascertain that a program of management reviews or self audits has been established which encompasses the requirements

of the regulation.) b. Reviewing the file of reports submitted

(forms 4789 and 4790) and ascertaining that they are properly completed and filed as re.

quired by the regulation and bank policy. c. Reviewing the bank's list of exempt custom

ers to determine that:
• Its contents conform to the requirements

of the regulation (103.22(e)) and that the
exemptions appear reasonable.
The bank has, in granting exemptions,

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appropriate.
e. Analyzing the bank's system of security and

protection against external crimes. Guidance
for this analysis is offered in the Appendix 10
this handbook.

adhered to its established policy.
d. Interviewing operations personnel (tellers,

platform officers, selected branch manag. ers, and international division management) to ascertain whether they are sufficiently knowledgeable concerning the regulation and operating procedures to assure compliance. (In those instances where a branch visitation is impractical, selected branch

managers may be contacted by telephone.) e. Reviewing the totals of cash shipped to and/

or received from the Federal Reserve Bank
(reported on Form MD-115) or correspon-
dent bank during the last six months. If any
amount appears high relative to the amount

Compirolier s Handbook for National Bank Examiners
February 1982

Cash Accounts: Domestic and International Examination Procedures

Section 201.3

the bank has reported on Form 4789 for the last six months, discuss the findings with

management. f. Meeting with a senior official or compliance

officer and submitting to either of them the Financial Recordkeeping and Reporting of Currency and Foreign Transactions (Form CC 1425-CL) for completion and signature. Explain all "no" answers. Correlate work performed in other areas of examination interest and forward the checklist to the regional office with the examination report, explaining any reported "no" answers. In the absence of any "no" answers retain the

checklist in the work papers. g. Based on the results of step f, and on an

12. Review foreign currency control ledgers and

dollar book value equivalents for:
a. Accuracy of calculations and booking proce-

dures.
b. Unusual fluctuations.
c. Concentrations.

d. Unusual items. 13. Review international division revaluation calcu

lations and procedures if performed by cash account operations staff. (The bank's accounting/auditing deparment may revalue cash accounts together with other foreign currency led

ger and future exchange accounts.) 14. Review the following items with appropriate

management personnel (or prepare a memo lo
other examining personnel for their use in re.
viewing with management):
a. Internal control exceptions and deficiencies

in, or noncompliance with, written policies,

practices and procedures. b. Uncorrected audit deficiencies. c. Violations of law. d. Inaccurate booking of U.S. dollar book value

equivalents for foreign currencies. e. Inaccurate revaluation calculations and pro

cedures performed by cash account opera

evaluation of the bank's policies and procedures, determine if appropriate operating and auditing standards are in place and document the conclusion in the work papers. If appropriate standards are not in place, perform those verification procedures

dealing with compliance with 31 CFR 103. 10. Review tellers' over and short accounts for re

curring patterns and any large or unusual items and follow up as considered necessary. Investigate differences centered in any one teller or banking office. Determine whether corrective

action has been taken, if required. 11. Determine, by discreet corroborative inquiry of

responsible bank officials and review of documentation, whether detalcalions and/or myste. rious disappearances of cash since the preceding examination have been properly reported pursuant to interpretive Ruling 7.5225 in the Comptroller's Manual For National Banks.

tions statt. 15. Prepare comments on deficiences or violations

of law noted above for inclusion in the exami

nation report. 16. Prepare a memorandum and update work pro

gram with any information which will facilitate future examinations.

Comptroller's Handbook for National Bank Examiners

February 1982

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