financial officer (CFO) and asked a lot of questions. This step was the
most important, because we discovered many violations and non-
posted transactions. For example, every time the CFO had not been
able to balance the financial statement, he had assigned the discrep-
ancy to a new bank control account. We discovered more than 30
such accounts. It took us many days and long hours to try to recon-
cile these accounts and we still werenot able to reconcile all of them.
That meant that we had to add such discrepancies to the bank losses.
5.Evaluate the quality of the bank auditors
After discovering the unfortunate state of affairs of the treasury
function at the bank and the fact that the auditors/CPA of the bank
never mentioned anything about it in their annual audited financial
report, management was very disappointed in the quality and authen-
ticity of the audits. We contacted the bank’s CPA and complained
about the unprofessional way the bank accounting and auditing sys-
tem had been handled. He did not have the time, he said, because he
was busy with bigger and more important banks. He relied on two
young accountants who would come to the bank to pick up the state-
ments from the CFO and leave. Management conferred with the
board and the bank’s lawyer. We had some concern about changing
the bank auditor. We worried that people might suspect that the CPA
auditor may have been in disagreement with bank management on
some issues and that is why the bank was motivated to change the
auditor. Management finally decided to push hard to change the
auditing firm because we were sure of the sincerity of our motiva-
tions. It took us a long time to find an audit firm that would accept a
bank that was losing money and had a new unproven management. I
called Mr. Findley, and he found a firm that accepted he job. He
kindly put in a very good word about the bank’s new management.
However, the new firm had a condition: they first wanted to review
the bank’s condition and then contact the existing audit firm. They
did. After numerous contacts and interviews, they decided to become
our auditors. We were all very impressed by the quality and depth of
their work, and we felt comfortable about this most important bank
activity.
6.Develop the unique RF niche at the Bank of Whittier
One of the most important steps in rescuing and restructuring the
bank was to develop a strategic vision for a niche that would character-
ize that bank. The following sections give a summary of the process we
used to articulate our RF finance system under difficult and challenging
conditions.302 THE ART OF ISLAMIC BANKING AND FINANCE