Internal Control Procedures The loan department in a bank is subject to regulation. Internal…

Internal Control Procedures

The loan department in a bank is subject to regulation. Internal auditors work for the bank to

ensure that the loan department complies with requirements. The internal auditors must verify

that each car loan file has a note signed by the maker, verification of insurance, and a title issued

by the state that names the bank as co-owner.

Required

1. Explain why the bank and the regulatory agency are concerned with these documents.

2. Describe the internal control procedures that should be in place to ensure that these documents

are obtained and safeguarded.