The Process of Bank Auditing

Banks and other financial institutions are required to undergo the process of bank auditing to ensure that all the financial operations being carried out are in full compliance of the legal requirements in the jurisdiction. This process is carried out periodically, with bank auditors reviewing the banks activities and services to compile a report outlining the financial institution’s standing.

The Bank Auditing Procedure

It is imperative that banks and financial entities complete the bank auditing procedure routinely. This ensures that they are classified as certified institutions within the jurisdiction. The following is a brief guideline about the process of bank auditing:

  1. When the bank audit request is received, it is important to review it thoroughly. Taking note of time restrictions, data requirements and presentation preferences.
  2. The bank owner should request a meeting with the financial managers, executives and important accountants in order to discuss how the data will be collected and presented for the audit. This is an opportunity for brainstorming and finding the best possible method of task delegation and time management.
  3. Establishing the storage file where all information and data related to the bank audit must be maintained. It is important to make all people involved in the audit aware of this so that all data is kept in one place.
  4. All data collected must be relevant and any information that is missing should be pulled from different sources in order to ensure that all areas of the audit are covered.
  5. Checking and cross referencing all the information and data in order to make sure it is correct and concise. There should be multiple checks as any mistakes will cause the report to be erroneous.
  6. Review the audit request and ensure that the data collected corresponds with the auditor’s request.
  7. Present the finalized information in the auditor’s preferred format.
  8. Bank owners should request an audit-compliance letter.

The process is fairly simple and helps the financial institution to maintain its standards. It is an opportunity for the staff to work together and support other departments in order to complete the audit in time.