SOCAL Bank Auditing

Auditing is a compulsory activity in every organization today as it ensures that the departments are free from fraud and resources are utilized effectively. SOCAL bank presents a special case for review since the payroll manager seemingly has a lot to handle and herself to audit her activities.

Risks with the Client

The client’s statements cannot be taken as a surety in place of actual evidence. Probable, she could be hiding some facts, which can only be unearthed if auditing is carried out. Her statements that the IRS approved their system and that there were no mistake with their operations should be substantiated using reliable evidence. The client’s job description should be reexamined. The client is most knowledgeable on processing payroll yet she has a wide area to operate. Duties like conduction of recruitments should be preserved for the human resource manager.

Control System

SOCAL Bank lacks a comprehensive internal control system. The client is doing the oversight of nearly the entire payroll process. She is the one witnessing whether the audit by the IRS gave their payroll process a clean pass. She states that she is the only person in charge of the entire process. The client should have a higher office to monitor her activities as she may make errors that she may not be aware of herself. The bank should create an office of internal auditor to audit the payroll manager.

Auditing Procedure

SOCAL bank requires a thorough auditing of its record book and inventories. A comprehensive audit of the banks’ operations will include auditing of its assets, liabilities and member’s equity, interests income and expense. Moreover, an audit of non-interest income and non-interest expenses will be critically audited. The net income will be determined and other comprehensive income. The balances of the fiscal year will be audited and all cash flows. The comprehensive auditing will identify the possible areas where funds can be lost through fraud and identify ways of minimizing the risk. This will be important in the growth and proper management of finances at the bank.