The bank HSBC aims to be one of the world’s leading and internationally reputed bank. It strives continuously to connect its customers to the opportunities they desire and helps them fulfil their targets and goals. HSBC bank owns a total of 7,500 branches across the globe spanning over 80 different countries. It is one of the major clearing banks within the U.K. having its headquarters located in London and a total of 1,800 branches across the U.K. HSBC has divided the banking facilities into four major segments namely the retail banking and Wealth management (RBWM), Commercial banking (CMB), Global banking and Markets (GB&M) and Global private banking (GPB) which are further subdivided. It has been reported that HSBC holds a lot of
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As an auditor it becomes essential to test the bank reconciliation for the year end 2014. Not only there should be a good internal control over cash but also appropriate tests for cash and bank balances. A confirmation thereafter needs to be sent to the bank so that the auditor can perform his tasks appropriately and independently. The cash entries need to be compared with the bank statements. The yearend balance should be similar to bank confirmation letter and to the balance mentioned in the bank reconciliation. It should be assured that there is a verification of outstanding lodgements, unpresented cheque and the calculations are mathematically correct. A precise record of direct debits and credits should be recorded and the post balance sheet transactions should be thoroughly …show more content…
It has set up grouping standards based on the business standards and the geographic locations. This has led to setting an effective credit control environment for the management of credit risk. The authority has been delegated within the limits set by the Board to carry out only specific tasks designated to each individual. The credit allocation then occurs under a sound credit –granting process and management. There has been set up an effective credit administration, monitoring and measuring process to ensure a comprehensive control over credit risk. For an auditor it is essential to check that these risk management activities are performed well and check that the responsibilities are carried out properly. He / she needs to validate the status development of the credit risk management system its compliance with the credit risk policy and rules. The auditor needs to check the accuracy of credit risk management process in line with the nature of the business and risk associated with it. The credit risk assessment should be validated and considered in view of their limitations and weaknesses. Further the accuracy and completeness of data used should be reconfirmed and stress test situations and matters of improvement should be looked
As an auditor it becomes essential to test the bank reconciliation for the year end 2014. Not only there should be a good internal control over cash but also appropriate tests for cash and bank balances. A confirmation thereafter needs to be sent to the bank so that the auditor can perform his tasks appropriately and independently. The cash entries need to be compared with the bank statements. The yearend balance should be similar to bank confirmation letter and to the balance mentioned in the bank reconciliation. It should be assured that there is a verification of outstanding lodgements, unpresented cheque and the calculations are mathematically correct. A precise record of direct debits and credits should be recorded and the post balance sheet transactions should be thoroughly …show more content…
It has set up grouping standards based on the business standards and the geographic locations. This has led to setting an effective credit control environment for the management of credit risk. The authority has been delegated within the limits set by the Board to carry out only specific tasks designated to each individual. The credit allocation then occurs under a sound credit –granting process and management. There has been set up an effective credit administration, monitoring and measuring process to ensure a comprehensive control over credit risk. For an auditor it is essential to check that these risk management activities are performed well and check that the responsibilities are carried out properly. He / she needs to validate the status development of the credit risk management system its compliance with the credit risk policy and rules. The auditor needs to check the accuracy of credit risk management process in line with the nature of the business and risk associated with it. The credit risk assessment should be validated and considered in view of their limitations and weaknesses. Further the accuracy and completeness of data used should be reconfirmed and stress test situations and matters of improvement should be looked