First Keystone Bank Essay

1. Prepare a list of internal control mental processs that banks and other financial institutions have implemented, or should implement, for their ATM operations.Financial institutions should implemented the following internal control procedures. The for the offshoot time one is Risk Assessment, which means financial institutions management should identifies, analyzes, and manages risks that can make believe the company. The split second one is Control Environment, this procedure require management of the institutions placement toward, awareness of, and actions concerning the internal control structure to in order to cast down the fraud and error. The third one is Control Activities, which means that institutions management should enact specific policies and procedures to achieve the management objectives.Whats to a greater extent, they should take necessary procedures to butt joint the risks. The forth step is discipline and communications. Institutions should gather ent irely necessary information to carry out internal controls. Providing, sharing and obtaining information is also very(prenominal) important, which is called communication. The last step is Monitoring. Which is an ongoing process to evaluate controls and determine whether all the operations are as intended. They changed when operating conditions change.2. What general conditions or factors turn the scrutinise approach or strategy applied to a bank clients ATM operations by its independent tenders?The scrutinizeor should consider the nature, timing, and extent of further analyze procedures to make decision. The nature of an audit procedure include its purpose and its type. So the purpose and the type of an audit procedure will influence the audit approach. The purpose of audit procedure determines whether it is a risk assessment procedure, a test of controls, or a substantive procedure. The types of audit procedures include inspection ofwritten documentation, inspection of assets , observation , orthogonal confirmation, recalculation, re dischargeance, analytical procedure, scanning, and inquiry.Timing refers to when audit procedures are performed or the result or data to which the audit evidence applies. The higher the risk of material misstatement, the more likely it is that the auditor may decide it is more effective to perform substantive procedures nearer to the period end rather than at an sooner date. On the other hand performing audit procedures before the period end may assist the auditor in identifying significant matters at an early stage of the audit.Extent refers to the quantity of a specific audit procedure to be preformed. The extent of audit procedure is determined by the judgment of the auditor after considering the tolerable misstatement, the assessed risk of material misstatement, and the phase of assurance the auditor plans to obtain.3. Identify specific audit procedures that may be applied to ATM operations. Which, if any, of these p rocedures might have resulted in the discovery of the embezzlement scheme at First Keystones Swarthmore branch? Explain. revue of documentation, observation, recalculation, analytical procedures, scanning, and inquiry may be applied to ATM operations.I think the following procedures can resulted in the discovery of the embezzlement scheme. The first one is inspection of documentation. Auditors can examine a client document and compare it with the exact money they save and take out from the ATM. The second one is observation. Looking the procedure of using the ATM to make current whether it is used with authority. The third one is analytical procedures. Auditors can analyzing plausible relationships among both financial and nonfinancial data of the ATM. The forth one is scanning. Performing a type of analytical procedure which involves reviewing accounting data to identify peculiar items. For example, the amount of money that put in the ATM is not fulfill the money that actually take out by customers.