Chapter 33 Auditing Banks and Savings Institutions.docx
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Chapter 33 Auditing Banks and Savings Institutions.docx
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Chapter33AuditingBanksandSavingsInstitutions
窗体底部
Part5
AuditingSpecializedIndustries
IntroductiontoPart5
Thediscussionsofauditingconcepts,principles,andproceduresinParts1through4ofthisbookarepresentedprincipallywithintheframeworkofentitiesengagedinmanufacturing,selling,andserviceactivities.Incontrast,thechaptersinPart5dealwithauditinganumberofspecificindustries.Whileeveryindustryhasatleastsomecharacteristicsthatsetitapartfromotherindustries,thosecharacteristicsdonotnecessarilyrequireuniqueauditstrategiesorprocedures.Insomeindustries,however,therisks,accountingprinciples,controls,transactions,andaccountsaresufficientlydifferenttorequirespecializedknowledgeonthepartofanauditor.SeventeensuchindustriesarecoveredinthechaptersinPart5.
Thefollowingchapterspresentdetaileddescriptions,asappropriate,ofthebusiness,economic,andregulatoryenvironmentandactivitiesoforganizationsintheindustry,theriskstheytypicallyface,uniqueaccountingprinciplesthathaveimplicationsforauditing,typicaltransactionsandkeycontrolsthatareuniquetotheindustry,andsuggestedauditingprocedures.Therelativeemphasisgiventoeachofthosetopicsandtheorganizationofthechaptersvarybyindustryandweredictatedbythenatureoftheindustryandtheenvironmentinwhichitoperates.Theintentistodescribeonlythecharacteristicsandauditingconsiderationsthatareuniquetoeachindustry.Accordingly,whenreadinganyofthechaptersinPart5,thereaderalsoshouldreviewthediscussionofauditingstandardsandproceduresinthefirst32chaptersofthebook;materialfromthosechaptersthatisapplicabletoauditsofspecializedindustriesgenerallyisnotrepeatedinPart5.
33
AuditingBanksandSavingsInstitutions
33.1OVERVIEWOFTHEINDUSTRY
33.1ARECENTDEVELOPMENTS
(a)IndustryandEconomic
(b)RegulatoryandLegislative
(i)FormationofNewHoldingCompanies
(ii)ChangesinRegulators
(iii)StructuringUndertheGLBA
(c)AllowanceforLoanLosses
(d)AccountingandAuditing
(i)DiscountsRelatedtoCreditQuality
(ii)NewIllustrativeFinancialStatements
33.2BANKREGULATION
(a)BankRegulatoryAgencies,
(b)FIRREA,
(c)FDICIA,
(i)AuditingReforms,
(ii)AccountingReforms,
(iii)PromptCorrectiveAction,
(iv)RequiredDisclosures,
(v)AuditingImpact,
33.3RISKFACTORSANDAUDITREACTION
(a)RiskFactors,
(b)InterestRateSensitivity,LiquidityManagement,andCapitalAdequacy,
(c)PlanningConsiderations,
(d)AnalyticalProcedures,
(e)Materiality,
33.4TYPICALTRANSACTIONS,CONTROLS,ANDAUDITTESTS
(a)Operations,
(i)Deposits,
(ii)ElectronicFundsTransferSystems,
(b)Loans,
(i)TypesofLoans,
(ii)LoanConfirmations,
(iii)LoanPolicyandEnforcement,
(iv)IncomeRecognition,
(v)LoanReviews,
(c)Investments,
(i)ControlObjectivesandAuditingProcedures,
(ii)Available-for-SaleandHeld-to-MaturitySecurities,
(iii)TradingSecurities,
(iv)TransfersandServicingofFinancialAssets,
(d)FederalFunds,
(e)RealEstateOwned,
(f)FiduciaryandOtherActivities,
33.1OVERVIEWOFTHEINDUSTRY
Banksareprimarilyinthebusinessofmoneybrokerage.Byacceptingdepositsandextendingcredit,banksactasconduitsbetweenthosewithfundstoinvestandborrowers.Bankloansandinvestmentsecuritiesareearningassets,andtheinterestincometheygenerateistheprincipalsourceofrevenueforthebankingindustry.
Severaldifferenttypesofinstitutionswithinthebankingindustry1performfinancialintermediaryandservicefunctions.Someofthetypicalactivitiesofthoseinstitutionsarelistedbelow.
TypeofInstitution
TypicalActivities
Commercialbanks
Acceptdeposits,makeloans,facilitatepaymentsandcollections,investinsecurities,performtrustservices,andprovidefinancialservices,suchasdiscountbrokerageandadvisoryservices
Thriftinstitutions(savingsandloan associationsandsavingsbanks)
Acceptdeposits,makemortgageandconsumerloans,investinsecurities,andprovideother financialservices
Trustcompanies
Managefundsandotherassets,thebeneficialinterestinwhichremainswiththeownerandnotthebank
Whilethedifferencesamongtheactivitiesoffinancialinstitutionswereatonetimefairlywellpronounced,legislationandaggressivebusinessdevelopmentinrecentyearshaveblurredthetraditionaldistinctions.Asaresult,thedifferencesbetweenbankinginstitutionsandothersinthefinancialservicesindustry,suchasinsurancecompaniesandsecuritiesbrokeragefirms,aredisappearingrapidly.
Abankmayacceptdepositsintheformofdemanddeposits,whichbearnoorlowinterest,andtimedeposits,whichordinarilybearahigherrateofinterest.Timedepositsconsistofsavingsaccounts,certificatesofdeposit,negotiableordersofwithdrawal(NOW)accounts,clubaccounts,andcommercialandpublicfundtimedeposits.BankearningsaregeneratedprincipallybymakingloanstobusinessesandindividualsandinvestinginU.S.governmentandmunicipalsecurities.Manybanksalsoactinafiduciarycapacitybyprovidingtrust,investmentmanagement,andsafekeepingservices.Otherincome-producingactivitiesincludeservicingmortgageloansforotherentities;providingcreditcards,safedepositboxes,cashierchecks,moneyorders,foreigncurrencyexchange,travelers'checks,andsavingsbonds;andprovidingconsultingservicesrelatedtocashmanagement,balancesheetfinancing,andpersonalequitymanagement.
CommercialbanksintheUnitedStatesareeitherfederalorstatechartered.Federal-charteredbanksmustinclude"national"or"N.A."(nationalassociation)intheirname,aresupervisedbytheOfficeoftheComptrolleroftheCurrency,andarerequiredtobemembersoftheFederalReserveSystem(FRS)andtohavetheirdepositsinsuredbytheFederalDepositInsuranceCorporation(FDIC).State-charteredbanksaresupervisedbythebankingauthoritiesofthecharteringstate,arerequiredtoobtainFDICinsurancecoverage,andmayelecttojointheFRS.Commercialbanksmaybeorganizedasunitbanks,branchbanks,orbankholdingcompanies,dependingonthelawsofthestateinwhichtheyoperate.Theyalsomayengageinforeignoperationsusingaforeigndepartment,foreignoffshorebranches,anEdgeActCorporation,oraforeignsubsidiaryoraffiliate.
Abankmayholdassetsthathavebeenentrustedtoitandforwhichitactsasagentorfiduciaryforthecustomer.Whilethebankmayhavephysicalpossessionoftheassets,theyarenotcarriedonitsgeneralledger.Thoseassets,whichareknownasnonbankassets,mayincludeavarietyofitems,suchasmarketablesecurities,realproperty,andotherpersonalproperty.Insomebanks,thevalueofnonbankassetsoftenapproximatesorexceedsthetotalassetsshowninthebank'sfinancialstatements.
33.1A RECENTDEVELOPMENTS(NEW)
Thebankingindustryisfacingsignificantchanges,mostsignificantlyontheregulatoryfront.ThepassageoftheGramm-Leach-BlileyAct(GLBA)in1999willreshapethefinancialservicesindustryintheUnitedStates,andseveralnewandproposedaccountingstandardsalsowillaffectthewaybanksdobusiness.
(a) IndustryandEconomic
Theconvergenceofthefinancialservicesindustryiscontinuingasbanksareacquiringbrokerages,financecompanies,andinsurancecompanies.Inaddition,manynonbankentitiesareapplyingforandobtainingthriftcharters.Thisisrapidlyincreasingcompetitionamongthevarioussectorsofthefinancialservicesindustry.
Toremaincompetitive,banksarebeingforcedtoexpandproductlines-subprimelending,leasing,insurance,securitiesunderwriting,assetmanagement,mutualfunds,trustmanagement-andmethodsofdistribution,primarilybyofferingservicesovertheInternet.
(b) RegulatoryandLegislative
OnNovember12,1999,PresidentClintonsignedintolawtheGramm-Leach-BlileyAct,alsoknownasthefinancialservicesmodernizationlaw,whichtookeffectonMarch11,2000.ThissweepingreformofbankinglegislationrepealedkeyprovisionsoftheGlass-SteagallActandtheBankHoldingCompanyActthathadpreventedfullaffiliationsamongbanks,broker-dealers,andinsurersandthathadprohibitedbanksfromsponsoring,organizing,managing,orcontrollingmutualfunds(exceptclosed-endfunds)oractingasunderwriterordistributorofsharesofanytypeofinvestmentcompany.TheGLBAalsofacilitatesbankaffiliationswithinsurancecompaniesbyremovingrestrictionsintheBankHoldingCompanyActandpreemptingstates'"anti-affiliation"lawspreventingbanksfromaffiliatingwithinsurancecompanies.
(i) FormationofNewHoldingCompanies. UndertheGLBA,financialinstitutionsmaydesignatethemselvesasFinancialHoldingCompanies(FHCs)thatmayownandcontrolthefollowing:
∙BanksandotherFDIC-insureddepositoryinstitutions
∙Broker-dealers
∙Insurancecompanies(lifeandnonlife)
∙Mutualfunds
∙Investmentadvisers
∙Firmsengagedin"financial"activities
∙Firmsengagedinactivitiesincidentalorcomplementarytopermissibleactivities
Financialactivitiesarebroadlydefinedaslending,securities,insurance,assetmanagement,mutualfund,fiduciary,investmentadvisory,andsecuritizationactivities.
Inaddition,thefollowingareconsidered"financial"activities:
∙ActivitiesontheFederalReserve's"closelyrelatedtobanking"listforbankholdingcompaniesasofNovember11,1999
∙ActivitiesthatbankholdingcompaniesarepermittedtoengageinoutsidetheUnitedStates
∙Merchantbankingactiviti
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