the bank’s adherence to consumers’ compliance regulations to
ensure that the bank has adequate systems and control procedures to
avoid any violations.
4.Loan Review Audit
This type of audit is conducted to assess the quality of the
bank’s loan portfolio and provide an early alert of problem loans
or negative portfolio patterns or trends, as well as the adequacy of
and procedure used to calculate allowance for loan and lease losses
(ALLL). The ALLL estimation process at the Bank of Whittier is
conducted, as discussed earlier, by following a unique risk-based
method and a proprietary computer program pioneered by the
bank to include in the calculation all risk factors that may have an
impact on the various credit facilities. The process will be detailed
in Chapter 12.
5.Information Systems, Technology, and Security Audits
These types of audits assess the controls over the bank’s elec-
tronic data processing and computer-related areas. These audits fo-
cus on management, development, support and delivery, data
security, and physical security. Information system and technology
audits also include a review of computer and client services systems,
end-user reports, electronic funds transfers, and service provider ac-
tivities. This type of audit should test the system and should be com-
pleted annually in the first quarter of the year. It also helps review
and critique security systems used by the bank.
V.Treasury, Financial, Operations, and Loans Management Monthly
Certifications
The responsibilities of the operations and loans departments are to
certify all general ledger accountsasprovidedbymanagementtothe
application—DDA, savings, time deposits, and loans. For example: op-
erations staff will be responsible for certifying all loan systems to the
general ledger, and the loans department staff will certify all operations
applications to the general ledger. The certifications will be completed
according to the certification listing and provided to the CFO monthly
before the tenth day of every month.Audit Response by Management
Management will prepare a written response to the board of directors
within 21 days from the date of the submission of the particular audit report
and its findings. The management response will outline any deficiencies or
312 THE ART OF ISLAMIC BANKING AND FINANCE