A financial institution's internal auditors should conduct periodic independent reviews of the funds transfer operation, including all pertinent internal policies and procedures.  An external audit can supplement or replace internal audit procedures.  Financial institution audits should verify the effectiveness of the funds transfer control environment and identify funds transfer deficiencies for correction.

Examiners should perform an evaluation of the institution's audit function to determine whether audit activities related to funds transfer operations are comprehensive and effective.  Examiners also should review the auditor's opinion of the adequacy of accounting records and internal controls for funds transfer operations. The review of audit procedures should focus on:

  • The scope and frequency of the internal funds transfer audit program;
  • The effectiveness of audit procedures in determining any control/operating problems disclosed since the previous examination and what corrective measures management has taken;
  • Audit work papers to ensure they document adherence to prescribed audit procedures;
  • IT audit coverage of new system enhancements and development projects; and
  • External audit findings and recommendations.


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