Discover the best practices for assessing the internal control structure of your bank loan cycle with this comprehensive audit program. It provides an outline of objectives aimed at ensuring accuracy, completeness, promptness and regulatory compliance in loan reporting and processing. It also underscores the importance of thorough verification processes, such as matching loan account numbers to the master file, validating details against established criteria, and monitoring interest yields in relation to current rates.

In addition, this tool outlines control measures for computer programs used in loan processing, stressing necessary authorizations for system changes and data access restriction to authorized personnel only. Furthermore, it helps auditors assess risks associated with loan transactions, such as financial loss due to unenforceable contracts or fraudulent disbursements, misstatement of accounts due to inaccurate recording, or non-recording of transactions. 

Sample audit questions include:

• Are independent reviews performed (including internal audit tests) to determine that adjustments contain proper approval?
• Does the loan committee and/or the board of directors review and approve foreclosed assets, nonaccrual loans and TDRs?
• Does the bank perform an internal regulatory compliance review in the loan area, including a detailed review of compliance with regulations?