What is Bank Auditing

Bank auditing is the procedure of reviewing the services and procedures adopted by banks and other financial institutions. It is a routine procedure that all financial services entities must undergo in order to ensure that they are in compliance with industry standards and jurisdictional regulations.

The Bank Auditing Procedure

Specialist accountants, known as bank auditors, have the responsibility of reviewing banks and financial entities. One of their primary duties is to focus on the accuracy, completeness and legitimacy of the bank’s financial activities.

This procedure is similar to that of official auditing reports that companies must file therefore it is not a procedure that should cause alarm for banks requiring an audit. The majority of banks and financial institutions find the bank auditing procedure a strenuous experience; however it is one of the most important procedures that must be completed periodically.

Some of the procedures and services reviewed in the bank audit are outlined below; however this list is not exhaustive:

  • Financial transactions
  • Bank wires
  • Automated clearing house (ACH)
  • Bank account monetary flow

Most banks undergoing a bank audit may request their clients for additional documents or information for their records. Clients are requested to assist the bank in fulfilling all the criteria that the bank auditor has outlined, thus completing the process in a professional and timely manner.

The primary focus of the bank auditing procedure is to ensure that the bank or financial entity is operating in compliance with all jurisdictional regulations. Moreover, this procedure enables the bank to review all the services they offer and make sure that their records are up to date.