ICBA - Education - Manual: Auditing the Bank's Trust Department

Manual: Auditing the Bank's Trust Department

This manual will cover:

  • Fiduciary Duties and Conflict of Interest - Fiduciary duties of the bank as trustee and executor are both at the core of the banks responsibilities to its clients as well as a primary risk to the bank.
  • Regulatory Requirements and Compliance - Compliance is the key risk in all trust departments. Lack of compliance may lead to litigation, fines and penalties.
  • Risk Assessment and Planning the Audit - Proper planning ensures the auditor’s goals and objectives are met.
  • Trust Operations and Internal Controls - An effective system of controls is imperative to properly perform the duties of the trust department.
  • Fiduciary Investments - Appropriate investment management is central to the fiduciary duties of the trustee.
  • Physical Security and Controls over Trust Assets - Key internal controls over assets held at other locations, safekeeping arrangements and audit controls.
  • Fraud Detection - Understand responsibilities in identifying and detecting fraud.
  • Administrative Audits - This audit is key to understanding account management. Look at potential “red flags” that may create a problem. 

Written by Neil Falken, CliftonLarsonAllen


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