Banks and Lending Institution Records

by

Thomas J. Garnier, CFE
Senior Auditor
U.S. Treasury Department
Bureau of Alcohol, Tobacco, and Firearms
Audit Operations

I. Banks and Lending Institutions - provides a record of financial transactions of owners and/or businesses.

A. Bank Statements- Provide the forensic accountant with a monthly summary of owners and/or businesses financial transactions (deposit and expenditures). In addition to providing the name of the bank, the name of the account, and the account number, bank statements also show check numbers, date of checks, deposit amounts, check amounts, monthly balances, and possible cash flow problems (*NSF checks, negative balances, etc.)

*Non-sufficient funds

1.) Canceled checks- Provides the forensic accountant with the following: the name of the bank, name on the account, the account number, payee name, check approving authority, and the memo notation section.

2.) Deposit ticket- show type of deposits (checks or cash).

3.) Deposit items- same as above.

4.) Debit/Credit Memos- (loans, bank charges, return checks.)

5.) Cash Transaction Records (CTR)- deposits & withdrawals

6.) Wire Transfer Records- appears on bank statement

7.) Safe Deposit log- shows number of trips to deposit box (date & time)

8.) Certificate of Deposits (CD's)- conversion of cash into investment

II. Loans- shows obligations (details) of owner and/or business as well as potential assets. In addition, loans include, as well as provide the forensic accountant with the name of the lending institution, name of the borrower, date of loan, monthly payments, interest rates, collateral, and terms of loan (length/period of loans).

A. Application- Primary source documents for the following: Name, address, city/state, telephone number, social security number of the borrower; credit references; amount needed or sought, employer's name; debts of the borrower; and the annual income of the borrower.

Documents that may accompany the application:

B. Financial Statements

C. Tax returns

D. Loan officer notes

E. Payment history

F. Dun and Bradstreet, TRW reports

III. Credit Cards- show mobility and/or location of the individual(s) during time of purchase(s).

A. Application- may contain same information as loan application

B. Monthly statement- show purchase history (dates, amount, items purchased, etc).

C. Payment history- self-explanatory.

reprinted by permission