Loan Audit Procedures
Loan Audit basically involves the review of the documentation supporting the loan, its accuracy and reliability and the extent of compliance with the applicable legislation. The procedure at length for Loan Audit is as follows:
The first step is to determine whether the reconciliations are properly completed on a recurring basis for all balance sheet accounts and internal demand deposit accounts (DDA).
Documentation Review / Examination of Records
The second step is to determine whether the loan documentation is adequate and is in compliance with the credit policy and other regulatory requirements and applicable legislation. Such determination and findings regarding the loan information is then properly recorded.
Evaluation of the Debtors Records
In this step an evaluation with regard to the credit/loan/ advance limits, realizing and correlating outstanding amount from parties, periodic balance confirmation, authority for material adjustments to parties’ account, periodic reconciliation statements, form and adequacy of security, recognition and realization of interest Income etc is conducted.
In this stage a review and audit with regard to the evidence regarding existence, completeness, valuation and disclosure related to the loan/debt is conducted.
On the basis of the evaluation conducted above, we formulate a report with regard to your loan which clearly states the status of your loan and whether there exists any kind of non compliance with the applicable rules and regulations.