Contributed 4/27/99 by Conville Britz  email: conville.britz@bon.com.na

Company Name:						Prepared By:
Reviewed By:
Year Ended:							Internal Audit Department

Audit Section:	Treasury	

Substantive Testing  - Buying & Selling of Foreign Exchange

Objectives and scope

With these tests, we will be trying to satisfy the following objectives:

Completeness of recording of all transactions concerning buying & selling of forex ;

Existence of all transactions actually recorded ;

Authorisation of all transactions ;

Valuation of all transactions recorded ;

Ownership of transactions recorded;

Presentation of foreign reserves on the monthly financial statements.


Programme:

Scrutinise documentation on buying and selling of foreign exchange for the past two (2) months and perform the following tests on documents:

- Trace all selected documents to authorisations to buy or sell. ( IRMC meeting approval, authorisations for government requisitions for forex, authorisations for Bank's own external payments.)

- Obtain number of deal ticket issued at beginning of period being covered and perform a sequence check on documents. Ensure sequence is unbroken and obtain reasons for any gap in sequence.

- Trace deal tickets to G/L ensuring that all deal tickets are captured and at the right amounts.

- Trace both legs (debit and credit) of the transactions being audited to the foreign bank statement.( Debit on bank where funds to buy were withdrawn from and credit on bank where funds bought (forex) were deposited.) Care should be taken that amounts reflected on the statements are correct using dealt rates.

- Trace balances at foreign banks transacted in at month-end to monthly financial statements for the audit period and ensure correct disclosure on the face of financial statements.