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General Objectives:
1. To check on the reliability of financial
records.
2.
3.
4.
APG for LC
IMPORT TRADE TRANSACTIONS a flow of goods/ bringing in of goods into the country from a foreign
source. Imports may be paid via:
A.
Letters of Credit
B.
Documentary Collections
Document against Payment (DP)
Document against Acceptance (DA)
Open Account Arrangement (OA)
Direct Remittance
Consignment
APG for LC
same with GL balance.
(LCs opened are booked under Contingent
accounts Sight or Usance LC Outstanding).
2.
AMLA
Cir 1389
Sec 9
Cir 1389
Sec 9;
Cir407
Cir 1389
Appendix
1
MAAB
dated
09.26.90
b. Firm
offer/Pro-forma
Invoice
containing information on specific
quantity of the importation, unit cost
and
total
cost,
complete
description/specification
of
the
commodity
and
Phil.
Standard
Commodity Classification code
c.
APG for LC
as required under PD 1853
6. Check if the deficiencies in the LC
application relative to the following were
referred to the client for regularization:
6.1 Incomplete name and/or address of
importer and exporter
6.2
6.3
6.4
6.5
6.6
6.7
APG for LC
1.4Ascertain that the reimbursing bank
was duly notified for any increase/
decrease in amount of the LC.
1.5
CPG No.
004/2004
10.3
10.4
BSP Cir.
No.909
Sec 9
Cir 844
USC No.
265/99
12.2
12.3
12.4
12.5
APG for LC
The amount shall be carried in the books (under
contingent account Bank Guarantees) at the
local currency equivalent of the shipment at the
banks booking rate permissible within the forex
band and shall be reversed upon surrender to
the bank of the shipside bonds duly cancelled.
1.
2.
3.
4.
5.
Letter of Indemnity
Trust Receipt (in case client has no TR
line, ascertain whether full payment of
the Customer Liability Account (CLS)
was required prior to the issuance of
the SG.)
Copy of Bill of Lading
Copy of Commercial Invoice
Steamship Guaranty (Undertaking for
release of cargo accomplished by
shipping agency and singed by client.)
Undertaking for discrepancies
Form 104 (Surrender of Original BL)
Accepted Draft Signed Across (for
Usance LC/DA only)
APG for LC
the production and surrender of the proper bill
or bills of lading or the expiration of one year
from date hereof whichever shall first occur.
It is further understood and agreed that all
terms and stipulation not related to the release
of the merchandise under guaranty are hereby
deemed inapplicable in the event of a
settlement of our liability, the place of payment
will be in Metro Manila, Philippines.
6.
7.
Ascertain correctness of
collected from the client.
8.
the
charges
APG for LC
Import Bills (upon negotiation of the LC)
Upon receipt of documents, the issuing bank
rechecks them and if satisfied that they comply with
the LC terms and conditions, it presents the same to
the importer/client for payment. The accounts used
to record the receivable of the bank from
importer/client (representing the value of the import
bills presented by the paying bank for negotiation)
are:
Timeliness of booking.
APG for LC
3.6 Requirement of pre-shipment
inspection/Clean report of findings
(CRF) is strictly observed, whenever
applicable.
4. In case of discrepancy, determine if the
following procedures were made:
Note: Booking of LCs with discrepancies remains
under contingent account Inward Bills for
Collection. Reversal and booking to CLIB/CLUAF is
upon acceptance of client of the discrepancies.
Notes:
Clients account debited vs. credit to CLIB for sight
LC or Due to FX Banks for usance LC
(corresponding set-up to CLUAF and related
Outstanding Acceptances GL accounts also
reversed). For usance LC, correspondent bank is
paid on maturity date whether import client pays or
not.
In case of non-payment from importer, contra
account debited is Past Due Import Bills or TR if
converted to TR.
APG for LC
CPB
2002/02
8.21.02
APG for LC
PD 115 or
TR law
Credit pol.
category
C
CPB No.
93/004;
2002/016
CPB
93/004 :
3.12.93
2.
3.
4.
APG for LC
prime CBD clients subject to Crecom
approval
Conversion of IB to TR by clients with
existing past due subject to appropriate
approval
5.
Goods subject of TR
4.1 Check whether only goods under
Section 4 of PD No. 115 (Trust
Receipt Law) were accepted under
the Trust Receipt Agreement.
4.2 Importation covering capital goods
are subject to the following:
6.
7.
APG for LC
6.3
8.
1)
2)
3)
4)
5)
Document against Payment (DP) bank advise importer of the receipt of the complete original shipping
documents and shall effect the release of said documents to importer upon receipt of payment. Bank
shall remit payment to the seller thru the correspondent bank abroad.
Document against Acceptance (DA) shipping documents are released to the importer by the local
bank thru the sellers bank upon the importers acceptance of the sellers bill of exchange obligating
importer to pay for the shipment at some future date.
Open Account arrangement (OA) - the shipping documents are sent and released by the seller directly
to the importer without coursing the documents thru the banks upon importers promise to pat at some
future date after shipment.
Direct Remittance Exporter sends documents directly to importer. Importer presents copies of the
documents and an application for foreign exchange to the bank when ready to pay. Bank then remits
proceeds to exporter according to instructions.
Consignment goods are not sold to importer but entrusted only by exporter to importer to sell. Title of
goods remains with exporter until sold.
DA/DP/OA/Direct remittance transactions are booked under contingent account Inward Bills for Collection
with sub-classification if DP/DA/OA.
AUDIT PROCEDURES
1. Obtain subsidiary ledger of all outstanding
inward bills for collection and tally the
same against GL balance as of audit cutoff date.
2. Check whether documents received were
stamped with a date of receipt and
recorded in the register (with IB reference
no.).
3. Determine whether all items recorded per
register were booked to its proper GL
accounts.
Cir 419
Sec 11
APG for LC
5. Ascertain that foreign drafts were signed
by the importer to indicate acceptance for
DA arrangement.
Check for the:
Date of acceptance
Date of maturity
Initial by an officer to indicate
authenticity/ validity of importers
signature.
6. Determine whether documents were
released only after acceptance of draft
under (IBC-DA) or upon payment (IBCDP).
7. Determine whether a billing statement was
prepared 10 days before maturity date
(based on correct selling rate for the day).
CB Cir
No.419
series
2004
Should be duly
accomplished/ signed by the importer
and assigned with reference Bank
Reference No.
Submitted to BSP
within 5 banking days after the end of
the reference week
Importations listed in
the RGI should tally with those of the
DA documents.
APG for LC
13. Investigate
items
which
remained
outstanding for a considerable length of
time
OTHER PRODUCTS
Stand-by LC Domestic and Foreign
Issuing bank acts only as the guarantor to a
Foreign Loan or Performance bond. May be
drawn only when debtor (accountee) defaults in
his payment (in case of loan) or obligation (in
case of a performance bond). Standby LCs
issued are booked under contingent account
Stand by LC.
1. Obtain subsidiary ledgers of outstanding
Stand-by LC and tally the same with GL
balance as at audit cut-off date.
2. Make an inventory of outstanding Stand-by
LC based on subsidiary ledger.
Application for Stand-by LC and compare
the same against LC opened. Check if
duly signed by an authorized signatory of
the bank.
CPG
98/003
MOR Sec
X347.1 & .
2
APG for LC
LC FX had prior clearance and approval of
CB through the Management of External
Debt and Investment Accounts Department
(MEDIAD) (CAG Memo 083/83).
8. Ascertain whether LC
specified an expiry date.
CPG
98/003
opened
has
MOR Sec
X347.1
APG for LC
within clients EBP Line and the same is
properly earmarked. If no line is available,
check if the purchase was covered with
instruction sheet duly approved by
appropriate lending body.
3. Check whether the following documents
were submitted by the clients prior to
purchase of Export Bills:
a. Original copy of Export Letters of
Credit (ELC) together with:
Draft
Comm
ercial Invoice
Purch
ase Order/ Firm Offer
Insura
nce Certificate (if any)
Letter
of Indemnity from the client duly
signature verified.
Such
other documents required by ELC.
Inform
ation Sheet
Report
of Foreign Sales
Export
Declaration
Custo
m Invoice
c.
APG for LC
required bank charges (such as interest
rate, documentary stamps, postage, cable
charges, etc.).
6. Trace disposition of proceeds of items
purchased.
7. Ascertain whether dishonored/ returned
items were immediately debited to clients
deposit account, taking into consideration
the following:
Exchange rate
Maximum selling rate
Interest applicable rate collected from
date of negotiation to date of actual
payment by the exporter.
8. Documents
purchased
should
be
couriered/ air mailed to the correspondent
bank within 24 hours from date of booking.
9. Past Due Export Bills
Check booking:
9.1 Sight drafts lodged to past due if w/o
payment after 45 calendar days
from booking date.
9.2 Usance drafts lodged to past due if
w/o payment 3 calendar days from
maturity date.
Outward Bills for Collection (OBC) FX
Sending of export documents to the Issuing
Bank for collection.
1. Obtain subsidiary ledger of outstanding
OBCs as of cut-off date and compare the
same with GL/FCCL balances.
2. Make an inventory of outstanding items
(remittance schedule) based on the SL
obtained.
3. Determine whether item sent for collection
was properly accounted for by assigning a
control number.
4. Verify whether items received for collection
were sent/ mailed to their respective
drawees within 24 hours upon receipt
thereof.
5. Test-check validity of collection items
already paid. Determine if paid/ credited to
exporter and only upon receipt of payment
from the Reimbursing Bank.
APG for LC
6. In case of dishonored collected items,
check if exporters/ sellers/ depositors were
billed when applicable for commission,
postage, documentary stamps and such
billings were promptly paid.
7. Investigate
items,
which
remained
unrealized/ uncollected for a considerable
length of time.
Cir 1389
USC2002/
001
10.
OTHER FUNCTIONS
CABLE SECTION
APG for LC
1. Ascertain whether computer terminals
were
properly
safeguarded
against
unauthorized access. Observe logging in
the MERVA system and check compliance
to
Confidentiality of Encoder/ Officers
password
Logging-off of computer terminals
when not in use.
2. Inquire and evaluate procedures in
monitoring including distribution and
reconciliation
of
incoming
SWIFT
messages.
Test-check to validate.
3. Ascertain whether control in the use of
swift facility were strictly observed:
Authorization of second officer on
outgoing
payment
messages
amounting to $5,000 and above.
Total outgoing messages per Traffic
Reconciliation were accounted against
duplicate
copies
of
messages
approved by officer.
No sending of message type (MT)
202 (authority to remit funds to a third
bank) to avoid double payment of
Import Bills.
Collection and accounting of Custom Duties
Unit uses the PAS system in reporting the custom
duties collected to Bureau of Customs and the
EFTIS system for the remittance of the custom
duties to BSP.
1.
2.
3.
APG for LC
including the collections for Head Office
IOD
and compare
against
DCAs
responded (for ORUs).
Check corresponding booking to Due to
CB- Bureau of Customs and Due to CBCB Circular 909 accounts for final and
advance duties collected, respectively.
5.
APG for LC
Cir 1389
Part 4
2.
3.
APG for LC
4.
On MPVR:
1. Check compliance to MPVR requirement.
2. Scan MPVRs and review long outstanding
material differences reported by the unit.
Check disposition/ adjustments made.
3. Check disclosure in the MPVR any SL/GL
discrepancies noted as of audit cut-off date.
Other Assets/Other Liabilities
1. Obtain Subsidiary Ledgers and compare
against GL Balances
2. Ascertain propriety of items composing the
account and verify authorization thereof.
3.
APG for LC
any additional items written-off.
PERSONNEL
1. Check the actual headcount of the Unit vs.
approved plantilla.
Check the actual
manpower
complement
vs.
existing
manpower complement on HRD Database.
2. Inquire and evaluate units monitoring and
reporting of the attendance of officers and
employees.
3. Test-check on the accuracy of reported
attendance.
4. Check compliance on:
4.1 10-day mandatory leaves
4.2 Rotation
4.3 Conflict of Interest
4.4 Proper Office decorum
4.5 Sanctions for employees with habitual
tardiness/ other violations.
EXPENSES
1. Obtain copy of duly approved budget
2. Inquire and evaluate monitoring of actual
versus budget, reporting and process of
securing additional budget/ approval for
unfavorable budget from the Group Head.
3. Test-check on validity and compliance to
proper approval.
INCOME
1. Check for any significant swings in the
income accounts. Account for the reasons.
2. Test-check for the validity and approval of
material reversals made to income (with
CAATs for a 3 month period).
INFORMATION SECURITY STANDARDS AND
POLICIES AND BUSINESS CONTINUTY
Refer to separate APGs as prepared by SNS
group.