Negotiable instruments require specific controls to prevent financial loss. IT operations staff members should handle or originate negotiable instruments following the institution's security procedures. Management should establish strong controls over the inventory of negotiable instruments, both in blank (unprocessed) form and after processing. Management should restrict and monitor physical and logical access to negotiable instruments and maintain a precise audit trail of issued and unissued items. Typically, negotiable instruments are numbered, and management can quickly identify missing items or sequences of items.
Additional controls are necessary if the organization uses signature writers (devices that automatically sign negotiable instruments as they are printed). At a minimum, the organization should secure the signature plates under dual control when not in use.
Risk Monitoring and Reporting