Ana səhifə

Examination Procedures eic note: Each state must provide a response to the following questions. The Eic may compile individual responses into a single response


Yüklə 0.54 Mb.
səhifə1/5
tarix25.06.2016
ölçüsü0.54 Mb.
  1   2   3   4   5

MMC Pre-Examination Planning Exam Procedures

Examination Procedures
EIC Note: Each state must provide a response to the following questions. The EIC may compile individual responses into a single response.

Yes

No

Examiner Notes [Document supporting evidence and note determinations and findings made.]

Did the state licensing file and NMLS extraction data reviews identify any areas of concern within the institution’s operations?










Did review of prior examination reports and workpapers identify any areas of concern within the institution’s operations?










Did state complaint file review identify any areas of concern within the institution’s operations? Examiner note: Additionally, review complaints that have been received but have not been entered in the agency’s complaint tracking system.










Did the FTC Consumer Sentinel complaint database review identify any areas of concern within the institution’s operations?










Did enforcement actions, reports or information identify any areas of concern within the institution’s operations?










Did board of director meeting minutes identify any areas of concern within the institution’s operations?










Do “in-process” investigations identify any areas of concern within the institution’s operations? Examiner note: Interview investigator to determine areas of concern.










Has the institution been examined by a federal agency? Examiner note: Obtain a copy of the examination report(s) and discuss the findings with the federal agency where necessary.










Did the institution provide all information requested by the Uniform Managers’ Questionnaire?










MMC Liquidity Exam Procedures:



Examination Procedures


Y



N

Examiner Notes [Document supporting evidence and note determinations and findings made]

1

Are policies, procedures, and risk limits related to liquidity adequate?










2

Are internal liquidity controls adequate?










3

Are the audit or independent review functions related to liquidity adequate?










4

Are information communication systems related to liquidity adequate and accurate?










5

Is the use of wholesale and rate sensitive funding sources reasonable?










6

Does the overall assessment of liquidity, including provisions for back-up funding sources, indicate liquidity needs can be met without adversely affecting operations or financial condition?










7

Do the board and senior management effectively supervise liquidity related functions?










8

Review prior examination reports and file correspondence for an overview of any previously identified liquidity concerns.










9

Review board or committee minutes for evidence of oversight, responsibility, routine management reports, and any identified liquidity concerns.










10

Determine if there are any recent or planned changes in strategic direction and discuss with management the implications for liquidity risks.










11

Review liquidity and funds management policies. Policies should provide sufficient guidance to management with regard to the board's risk tolerances and oversight responsibilities. Liquidity guidelines may also be found in other policies, such as the Investment Policy or Loan Policy, but taken together should:

  • Provide authorization to an individual(s) or committee, delineating responsibilities for planning, executing, and reporting.

  • Describe acceptable funding sources and an acceptable mix of uses, by type and maturities (e.g., investment securities, loan mix, other assets).

  • Define and place limits upon certain types of funding sources and uses of funds, including significant off-balance-sheet positions. Some common limits include:

  • Maximum loan-to-deposit ratio or loan-to-asset ratio.

  • Reliance on less stable funding of longer-term assets.

  • Individual and aggregate limits on borrowed funds by type and source.

  • Minimum level of short-term investments.

  • Provide contingency liquidity plans for use in emergency funding situations, including periods when unsecured borrowing lines and other credit sensitive funding is unavailable or cost prohibitive.










12

Review the funds management process with management. Consider attending an ALCO meeting to evaluate the process.










13

Determine if policies, procedures, and risk limits related to liquidity are reasonable in relation to management abilities, current economic conditions, the nature and complexity, and the overall condition of the institution.










14

Evaluate the frequency and timeliness of liquidity policy reviews and updates by the board of directors.










15

Determine if sufficient separation of duties (or comparable controls) exists over the preparation of reports used in managing the liquidity function.










16

Determine that internal management reports concerning liquidity needs and available sources of funds are prepared with the appropriate frequency and reviewed by senior management and the board of directors.










17

Determine if management complies with liquidity policy guidelines and documents the reasons for any variance.










18

Determine that the scope of the audit or independent review is sufficient to identify policy, reporting, internal control, and compliance deficiencies related to liquidity.










19

Determine that liquidity independent review results are properly reported to the board.










20

If recent reviews disclosed any deficiencies, determine if management responses are reasonable.










21

Determine if internal management reports provide sufficient information for ongoing liquidity management decisions and for monitoring the results of those decisions.










22

Determine if board and senior management reports provide sufficient information to monitor compliance with board policies and guidelines related to liquidity.










23

Determine if liquidity needs and risks are effectively communicated to all areas affected.










24

Consider testing liquidity reports for accuracy by comparing data with regulatory reporting schedules and subsidiary records.










25

Assess the potential impact on liquidity of asset sales that include recourse provisions.










26

Determine the extent of liquidity provided by the loan portfolio.










27

Determine the impact of any related asset pledging and other off-balance sheet arrangements, e.g.; FHLB letters of credit.










28

Review recent asset sales or unusual borrowings prompted by unplanned liquidity needs and determine if there were any adverse affects on operations or financial performance.










29

Explore and assess the impact of any other significant trends or changes in sources and uses of funds identified during the preliminary review process.










30

Review contingency funding arrangements and determine if they are adequate given the institution's past, present, and prospective liquidity position, strategic plans, and overall financial condition. Consider:

  • Sources of contingency funding;

  • Reliability of contingency funding (eg. Revocable, irrevocable vs. "as available"); and

  • Terms and conditions of alternative or contingency funding arrangements.










31

Calculate the applicable ratios under the ratio analysis sections and determine the institution’s adequacy relative to those ratios.












MMC Earnings Exam Procedures:





Examination Procedures


Y


N

Examiner Notes [Document supporting evidence and note determinations and findings made]

1

Are profit, planning, and budget practices adequate?










2

Are internal controls related to earnings adequate?










3

Are the auditor or independent review functions for earnings adequate?










4

Are earnings information communication systems adequate and accurate?










5

Are earnings at a level appropriate for the institution’s risk profile?










6

Are earnings sustainable?










7

Do the board and senior management effectively supervise this area?










8

Review previous reports of examination, prior examination workpapers, and file correspondence for an overview of any previously identified earnings concerns.










9

Review the most recent audits and independent reviews and identify deficiencies concerning reliability of information systems that may affect quality and reliability of reported earnings.










10

Review management’s remedial actions to correct examination and audit deficiencies related to earnings.










11

Discuss with management any recent or planned changes in strategic objectives and their implications for profit plans.










12

Review board and committee minutes and management reports to determine the level and quality of management information systems related to earnings.










13

Review the recent balance sheets to determine if there have been and significant changes in balance sheet structure that could materially affect earnings performance.










14

Review strategic plans, profit plans and budgets to determine if the underlying assumptions are realistic. Determine the sources of input for profit plans and budgets. Profit plans and budgets should address the following areas with detail appropriate for the size and complexity of the institution:

  • Anticipated level and volatility of interest rates;

  • Local and national economic conditions;

  • Funding Strategies; Asset and liability mix and pricing;

  • Growth objectives; and

  • Interest rate and maturity mismatches.










15

Compare earnings performance to budget forecasts. Determine if management compares budgeted performance to actual performance on a periodic basis and modifies projections when interim circumstances change significantly.










16

Review management’s procedures to prevent, detect, and correct earnings errors.










17

Determine if the income and expense posting, reconcilement, and review functions are independent of each other. Consider testing selected income and expense items to observe the operational flow of transactions. Areas commonly selected for review are:

  • Large Volumes of other income (miscellaneous, service fees, or any other unusual accounts)

  • Proper treatment of loan origination fees per SFAS 91.

  • Insider expense accounts.

  • Management fees or other payments to affiliates.

  • Significant legal fees.










18

Determine if significant income, expenses, and capital charges are reviewed and authorized.










19

Determine if insider related items are routinely reviewed for authorization and appropriateness.










20

Determine that the audit or independent review program provides sufficient review of earnings relative to the institution’s size, complexity, and risk profile. These activities should:

  • Recommend corrective action when related to earnings warranted;

  • Verify implementation and effectiveness of corrective action related to earnings;

  • Assess separation of duties and internal controls related to earnings;

  • Determine compliance with profit planning objectives and accounting standards.

  • Assess the adequacy, accuracy, and timeliness of earnings reports to senior management and the board;

  • Include sufficient transaction testing to assure income and expenses are accurately recorded.










21

Determine if managerial earnings reports provide sufficient information relative to the size and risk profile of the institution.










22

Evaluate the accuracy and timeliness of the earnings reports produced for the board and executive management. These may include:

  • Periodic earnings results;

  • Budget variance analyses;

  • Income projections;

  • Large item reviews;

  • Insider related transaction disclosures;

  • Tax planning analyses.










23

Validate the accuracy of Reports of Income where necessary.










24

Assess the level, trend, and sustainability of return on average assets relative to historical performance, peer comparisons, the organization’s risk profile, and local economic conditions. Determine areas needing further investigation.










25

Evaluate the level and stability of the institution’s net interest margin.










26

Evaluate the level and trend of overhead expenses.










27

Evaluate the level, trend, and sources of non-interest income.










28

Review the level and trend of provisions for loan and lease losses and the relationship to actual loan losses to determine the impact of asset quality on earnings.










29

Review the level and trend of non-operating gains and losses and their impact on the earnings.










30

Determine whether there have been any nonrecurring events that have affected earnings performance. Consider adjusting earnings on a tax- equivalent basis for comparison purposes.










31

Evaluate the level and trend of income tax payments recognizing the institution’s basis for filing taxes.










32

Assess the ability of earnings to support capital growth. Review the earnings retention rate in comparison to the intuition’s potential growth rate.










33

Evaluate the earnings impact of activities with affiliated organizations.










34

Determine if board records document routine attention to institution earnings and timely responses to significant budget deviations.










35

Assess compliance with institution policies, applicable regulations, and governing accounting standards related to earnings.










36

Calculate the applicable ratios under the ratio analysis section and determine the institution’s adequacy relative to those ratios.









  1   2   3   4   5


Verilənlər bazası müəlliflik hüququ ilə müdafiə olunur ©atelim.com 2016
rəhbərliyinə müraciət