Transactional Audits

Transactional Audits

NETBankAudit offers specialized transactional audits to address the unique risks and regulatory requirements associated with high-risk banking activities. Each audit is designed to evaluate the effectiveness of your institution’s controls, policies, and procedures, ensuring alignment with industry best practices and regulatory expectations. Our approach includes observation, inspection, transaction testing, interviews with relevant staff, and a review of supporting documentation. Sampling is performed using COSO and COBIT approved standards, with detailed workpapers and reports provided for each engagement.

Digital Banking Transaction Level Audit

Digital Banking introduces unique risks and regulatory expectations for financial institutions. As electronic transactions increase, federal regulators require expanded risk management practices to address these evolving challenges. NETBankAudit’s Digital Banking Audit evaluates the effectiveness of your institution’s controls, policies, and procedures related to digital banking activities.

Scope and Key Control Areas

• Governance: Board and senior management oversight, risk assessment, policies and procedures, outsourcing and vendor management, contingency planning and preparedness.
• Operations: Enrollment and account administration, input/output controls, training and awareness.
• Security: User access controls, logical access controls, logging and monitoring.
• Compliance: Security, privacy, and advertising; deposit and loan products and services; consumer affairs compliance (Regulations B, D, E, P, Z, CC, DD; ECOA, E-Sign, FHA, FCRA, RESPA).

Audit Approach

• Conduct a comprehensive “Wire-to-Wire” Transaction Flow Analysis to identify and assess all key control and exchange points.
• Utilize sampling as needed, following COSO and COBIT approved standards.
• Document all findings and recommendations in a detailed report and workpapers.

Wire Transfer Transaction Level Audit

Wire transfer activities are governed by regulatory statutes and FFIEC guidance, requiring robust controls to prevent fraud, errors, and regulatory violations. NETBankAudit’s Wire Transfer Audit assesses the effectiveness of your institution’s wire transfer controls and compliance.

Scope and Key Control Areas

• Develop a “wire-to-wire” transaction flow understanding, identifying all key control/exchange points and associated risks.
• Verify that transactions are executed and approved in accordance with bank policies, procedures, and client-specific authorization.
• Ensure physical and logical access is appropriately controlled and restricted to authorized individuals.
• Safeguard data, documentation, and records.
• Assess contingency measures and regulatory compliance (Regulations E & J, OFAC, FFIEC, Federal Reserve Banks’ FedLine security requirements, and other applicable requirements).

Audit Approach

• Perform observation, inspection, transaction testing, and staff interviews.
• Utilize sampling as needed, following COSO and COBIT approved standards.
• Provide a detailed report and supporting workpapers.

Remote Deposit Capture Transaction Level Audit

Remote Deposit Capture (RDC) enables customers to deposit items electronically, introducing additional risks beyond traditional deposit delivery systems. NETBankAudit’s RDC Audit evaluates the controls and compliance of your institution’s RDC function.

Scope and Key Control Areas

• Ensure appropriate senior management oversight and vendor management.
• Perform a transaction flow analysis to verify that control/exchange points are identified and fraud/risk concerns are addressed.
• Verify staff support, training, segregation of duties, and cross-training.
• Assess user access (logical and physical) and policies for correction and re-submission of erroneous data.
• Ensure data integrity, balancing to control totals, and reconciliation of disputed data.
• Review security, exception logging, and disaster recovery planning.
• Determine compliance with Check 21 Act, Regulation CC, Regulation J, and FFIEC guidance.

Audit Approach

• Conduct observation, inspection, transaction testing, and staff interviews.
• Utilize sampling as needed, following COSO and COBIT approved standards.
• Document findings in a detailed report and workpapers.

ACH Audit (NACHA Compliance)

Automated Clearing House (ACH) activities are subject to strict NACHA rules and regulatory requirements. NETBankAudit’s ACH Audit assesses your institution’s compliance and operational controls over ACH functions.

Scope and Key Control Areas

• Review documentation, perform interviews, and inspect relevant controls for ACH processes.
• Assess compliance with the latest NACHA Operating Rules and industry best practices.
• Evaluate recordkeeping, authorization, risk management, and exception handling procedures.
• Identify control weaknesses and provide recommendations for improvement.

Audit Approach

• Follow the guidelines and instructions for ACH Audit as defined in the latest ACH Work program published by EPCOR.
• Utilize sampling as needed, following COSO and COBIT approved standards.
• Prepare a written report with detailed findings, assessments, and supporting documentation.

Deliverables

• Executive summary and detailed report for each transactional audit, including overall and individual control objective ratings and risk ratings.
• All reported issues include condition, cause, effect, and recommendation statements, with priority ratings and a tracking mechanism for follow-up.
• Comprehensive workpapers supporting all findings and recommendations.