Sector Matrices - Banking and Capital Markets (Capital Markets)

Sector Matrices - Global Banking and Capital Markets (Capital Markets)
Example Significant Account to SCOT Matrix
Accounts
A. Financial Statements and Disclosures
AA. Consolidated Financial Statements and Disclosures
C. Cash and Short-Term Deposits
DB. Securities Owned/Securities Sold/Not Yet Purchased and Related Income Statement Accounts
ER. Dividends and Interest
ER. Dividends and Interest
EV. Stock Borrow/Reverse Repurchase Agreements
EW. Receivables from Customer
EX. Receivables from Clearing Organizations, Depositories and Brokers
EY. Receivables from Clearing Broker (Introducing Broker Only)
EZ. Underwriting and Syndicate Receivables

I. Intercompany Balances and Transactions
J. Non-Current Receivables, Non-Current Deposits, and Other Non-Current Financial Assets
J. Non-Current Receivables, Non-Current Deposits, and Other Non-Current Financial Assets
K. Property, Plant and Equipment and Related Income Statement Accounts
L. Intangible Assets, including Goodwill and Related Amortization
N. Trade Payables
N. Trade Payables
N. Trade Payables
NF. Stock Loan/Repurchase Agreements
NG. Payables to Customer and Related Income Statement Accounts
NH. Payables to Clearing Organizations, Depositories and Brokers
NI. Payables to Clearing Broker (Introducing Broker Only)
NJ. Dividends and Interest Payables
NJ. Dividends and Interest Payables
NK. Underwriting and Syndicate Payables
O. Income Taxes, Deferred Taxes and Related Income Statement Accounts
OOT. Indirect Taxes
P. Provisions, Other Liabilities and Deferred Revenue
P. Provisions, Other Liabilities and Deferred Revenue
Q. Non-Current Loans and Borrowings, Leases and Related Income Statement Accounts
Q. Non-Current Loans and Borrowings, Leases and Related Income Statement Accounts
S. Derivatives/Hedging/Commitments/Contingencies
T. Equity
T. Equity
T. Equity
UA1. Asset Management Fee Revenue
UA2. Commission Revenue
UA3. Principal Transactions Revenue
VB. Compensation Payables and Related Expenses
VD. Non-Interest Income and Expense
VD. Non-Interest Income and Expense
Classes of Transactions/Processes
Financial Statement Close
Clearance and Settlement (including purchases and sales)
Compensation (including sales and trading)
Customer Cash and Securities Receipts/Disbursements
Front Office Sales and Trading Execution
Intercompany transactions and eliminations
Trade Payables/Cash Disbursements (other than street-side and customer)
Corporate Actions (principal, dividends, interest, etc.)
Valuation and Pricing
Credit, Collateral and Operations Risk Management
Asset Management Fee Revenue Process
Customer Account Management
Transaction Type
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Investment Banking Activity

Assess Assets for Impairment
Depreciate Property, Plant and Equipment
Purchases, Trade Payables and Rebates
Calculate Income Taxes (Provision and Valuation)
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Estimation
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Estimation
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Non-Routine,Estimation
Non-Routine
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Routine
Record and Monitor Loans and Borrowings

Estimate Commitments and Contingencies
Manage Derivatives and Hedges
Account for Share-Based Payments
Adjust for Foreign Currencies
Non-Routine
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Estimation
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Sector Matrices - Global Banking and Capital Markets (Capital Markets)

Example Risk and Control Matrix
Classes of Transactions/Processes
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and customer)
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and customer)
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and customer)
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WCGWs
C-Advisory fees are not billed and collected timely.
C-Advisory fees are not calculated on all eligible accounts.
C-Subledger balance does not agrees with the general ledger balance.
C-Transactions are not posted in the correct period.. Trade date for regular way settlement transactions.Settlement date for delayed
settlement/non-regular way settling transactions.
E/O- Fictitious/duplicate advisory fees are recorded..

E/O-Fictitious customers exist.
E/O-Fictitious customers exist.
M/V-Advisory fees are not calculated or recorded correctly.
M/V-Incorrect commission rates, asset levels, asset management fees, or payroll rates are used..
C,E,R&O-Uncompared trades remain unidentified and unresolved.

C,E,V,R&O-Recorded transactions do not reflect counterparty terms..


C,E/O-"Cancel/correct" trades are not properly recorded..

C,M/V-Transactions files are incorrectly calculated and summarized.. Totals includes summarization of financial instruments and
commitments, interest income and expenses, realized and unrealized gains/losses, and related cash receipts and disbursements.
C-Financial exposure associated with unresolved items is not recorded.


C-Securities borrows/loans and repos (and related rebates/interest) are not recorded properly..
C-Transactions are not recorded..



C-Transactions are recorded in the wrong account..



E/O-Fictitious/duplicate trades are recorded.


R&O-Cash or securities move without proper authorization.

R&O-Settlement suspense items (i.e. fails, money differences) remain unidentified and unresolved..
C-Transactions (or transaction summaries) are not properly posted to the general ledger.
E/O, R&O-Fictitious/duplicate payroll disbursements are made..
M/V-Cash disbursement/receipt amounts recorded do not agree with amounts paid..

C,E/O,R&O-Principal, dividends and interest breaks are not identified and resolved.
C,R&O-Voluntary corporate actions do not reflect customer instructions..
C,R&O-Voluntary corporate actions do not reflect customer instructions..
E/O-Fictitious/duplicate corporate actions are recorded.
E/O-Fictitious/duplicate corporate actions are recorded.


R&O-Setup of principal, dividend or interest amounts do not reflect related rights or obligations..
C,E,V,R&O-Customer account activity is not appropriate for customer profile..

C,E,V,R&O-Customer complaints are not captured and/or addressed..
C,E,V,R&O-Customer complaints are not captured and/or addressed..

C,E,V,R&O-Customer statements (electronic or hard copy) are not received by customers..
C,E-Account setup does not reflect firm standard or customer expectation.

C-Customer statements (electronic or hard copy) do not reflect actual customer cash and positions, including pricing..
E-Broker sets up fictitious customer..
C-Cash receipts are not recorded when received..

C-Cash receipts/disbursements are recorded in wrong period..






E/O-Fictitious/duplicate receipts/disbursements are recorded.









M/V-Front Office calculated trading profit and loss is incorrect..







E/O,R&O-Fees are recognized prior to being earned.
E/O,R&O-Fees are recognized prior to being earned.
E/O-Fictitious/duplicate investment banking transactions are recorded.
M/V-Investment Banking fees and expenses are incorrectly calculated.

C,E/O-Invoice adjustments are not properly authorized and/or recorded.
C,E/O-Invoice adjustments are not properly authorized and/or recorded.
C,E/O-Rebates are recorded prior to meeting all conditions or in error..
C,E/O-Rebates are recorded prior to meeting all conditions or in error..
C,M/V-Invoices are incorrect as to prices, quantities, date service performed, etc..

C-All purchases/payables incurred are not recorded..

C-Coding of purchases to the G/L is incorrect.. Including by division, operating unit, fixed assets, prepayments, inventory, purchase
discounts, purchases intended to reduce other current liabilities, and expenses to the correct general and subsidiary ledger account,
subaccount and/or other appropriate classifications.
C-Extensions/totals in Trade payables subledger/purchases journal are incorrect..
C-Purchases are not recorded in the proper period..

C-Receiving documents are not generated for all goods received..

C-Trade payables subledger/purchases journal incorrectly posts to the general ledger..
C-Trade payables subledger/purchases journal incorrectly posts to the general ledger..
E/O-Debit memos are generated for no reason..

E/O-Fictitious/duplicate purchases are recorded..

E/O-Fixed asset purchases/interest expense are incorrectly capitalized..

E/O-Purchased services are not authorized in accordance with policy..
R&O-Recorded purchases are not evidenced by appropriate documentation and/or were not authorized prior to assigning rights to
assets..
assets..
assets..
assets..
C-All cash disbursements are not recorded.


C-Purchases/payables are not recorded..
C-Transactions and provisions are improperly coded and recorded..
E/O-Fictitious/duplicate purchases (and related disbursements) are recorded.

M/V-Accrued liabilities are not properly calculated.

M/V-Vendor invoices reflect incorrect prices/quantities..

M/V-Vendor invoices reflect incorrect prices/quantities..
M/V,P&D-Fair value of customer securities is incorrect..





M/V,P&D-Fair value of firm securities is incorrect..

Controls
Aging analysis is prepared and monitored regularly for
outstanding items, with differences resolved on a timely basis.
Exception reports are generated when advisory and management
fees are changed.
Invoices are prepared based on agreements and are reviewed by
appropriate personnel prior to being sent.
System will generate an aging report of billing and collections for
advisory fees.
Confirmations are compared to accounting records by a person
independent of person entering transactions.
Independent review and recalculation is performed.
Written documentation and authorization must be obtained from
the customer in order to discretionarily manage the account.
Control Type
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Application
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Application
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Manual Prevent
Application balancing procedures are in place to validate the

completeness and timeliness of subledger postings to the general
ledger.
Application
Automated reconciliation engine is used to reconcile transactions
from the appropriate subsystem to the general ledger.
Application
Fail reports are generated and exceptions are resolved.
Fails ledgers are reconciled monthly from the subledger to the
general ledger and stock record
Application
IT-Dependent Manual
Firmwide reconciliation engine is used to reconcile cash

disbursements and cash receipts from the appropriate subsystem
to the general ledger.
Application
Month-end reconciliations of subledgers to the general ledger are
performed.
IT-Dependent Manual
Reconciliations of trade blotter to the subledger, general ledger

and stock records are performed.
Stock record is balanced daily, with breaks investigated and
resolved on a timely basis.
System automatically validates the completeness of data feeds
from feeder systems.
System is configured to map accounts to financial statement
lines.
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Application
Application
Accrued liability accounts are reviewed for reasonableness on a

timely basis.
IT-Dependent Manual
An exception report is generated and reviewed for differences

between the stock record and the Street ( i.e. custodians,
depositories).
Application

ledger.
Application
Application
Compliance department monitors escheatment processes.
IT-Dependent Manual
Controller reviews significant transactions to ensure revenue is

recognized in accordance with policy.
IT-Dependent Manual
Exception reports are generated for differences between the

back-office system and the clearing organization.
Application
Exception reports are generated for position and money out of

balance conditions.
Application

fees are changed.
Application
Exception reports, including all suspense items, are automatically

generated by the system and reviewed.
Application
Financial statements and trial balance are reviewed.
IT-Dependent Manual

Application
Manual date overrides are restricted to authorized personnel.
Application

performed.
IT-Dependent Manual
Nonstandard journal entries are automatically routed to
appropriate personnel for approval.
Application
Reconciliations between the back-office system and the clearing

organization are performed.
IT-Dependent Manual
Reconciliations of nostro (company's accounts held by others)

balances at the clearing organizations and other financial
institutions are performed daily.
IT-Dependent Manual

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Securities lending subledger is reconciled to the general ledger,

with differences investigated and resolved on a timely basis.
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Support for nonstandard journal entries is reviewed.
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Suspense and clearing accounts are reviewed and reconciled on

a timely basis.
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lines.
Application
Tickets are prepared by the Trader and reconciled to the system

blotter on a daily basis.
IT-Dependent Manual
Trades in excess of established limits are rejected, flagged and

logged prior to entry.
IT-Dependent Manual
Trading limits are established by an independent management

team for each product and Trader.
Confirmations are compared to the accounting records by a
person independent of the person entering the transactions.
Customer account opening process, customer information, and
customer suitability are validated prior to customer set-up in the
system.
Customer accounts are periodically reviewed and/or confirmed by
the Quality Assurance Department.
System will not allow duplicate journal entry numbers.
Customer addresses are validated and independently confirmed.
Advisory fees calculations are independently reviewed for
reasonableness.
Product Controller reviews daily profit and loss for
reasonableness.
Results are compared to budget and prior periods.
Manual Prevent
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Manual Prevent
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Application
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An automatic comparison of purchased and sold securities

produces a commission(s) break report.
Appropriate personnel review and compare trade all tickets with
supporting documentation.
Commission rates are independently monitored.
Credit Risk Management authorizes and approves counterparty
exposure limits
balance conditions.
Application
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Manual Prevent
Application
Application
HR authorizes changes in employment status.

Manual Prevent
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reasonableness.
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System generates notices or reports when commission rates are
changed.
Application
System generates transaction confirmations for each trade on the
trade date and then automatically sends it to counterparties
Application
Manual Prevent
Values of existing balances are electronically verified through the
securities transfer system.
IT-Dependent Manual
Management regularly reviews key operations risk indicators.
IT-Dependent Manual
Trade confirmations from counterparties are received.

Transaction details are compared with information from
counterparties (i.e. purchases and sales) prior to settlement, with
differences investigated and resolved.
Audit trail of changes made to models are produced and
reviewed.
Documentation of changes made to models is produced by the
system.
Market validations, calendar data and order information is
captured and validated.
Pricing by traders performed manually is independently reviewed
for reasonableness.
reasonableness.
System automatically prices securities using valid market data
feeds.
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application

Application
Trade details are matched to independent confirm by independent
individual.
IT-Dependent Manual
IT-Dependent Manual
Transactions for which details do not agree to security master file
are rejected and listed on an exceptions report for review.
Application
Unpriced securities are manually priced by appropriate personnel
using third-party broker quotes or other independent sources.
IT-Dependent Manual
"Cancel/correct" trades are flagged once processed and
reviewed.
IT-Dependent Manual
IT-Dependent Manual

depositories).
Application
Application has an audit trail of all cancel/correct trade information
and that information is reviewed.
IT-Dependent Manual
IT-Dependent Manual
Daily investigation of new fails is performed
Fails greater than xx days outstanding are confirmed for both
amount and shares.
Independent function performs checks to ensure that the
aggregate trading limits are not exceeded.
Journal entries made to clear suspense accounts are reviewed
and approved
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Phone conversations are recorded.

Manual Detect
IT-Dependent Manual
IT-Dependent Manual
individual.
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual

depositories).
Application

ledger.
Application
Automatic reconciliations between the purchases and sales

system and the trade system are performed.
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
Customer credits and debits are reconciled to the general ledger

prior to completion of the calculation.
IT-Dependent Manual
Daily front to back position reconciliations are performed.
IT-Dependent Manual

Application
IT-Dependent Manual

IT-Dependent Manual
Nightly report produced comparing settled trade ticket interest to

an independently calculated amount
IT-Dependent Manual

reasonableness.
IT-Dependent Manual

IT-Dependent Manual
Reports are generated to identify additions, changes, or deletions

to the mapping tables.
Application
Security master file details validated by either comparison to

market data feeds or secondary review.
IT-Dependent Manual
Settlement date activity is reconciled to appropriate subledger

accounts, with differences investigated and resolved on a timely
basis.
IT-Dependent Manual

Application

lines.
Application

Application

IT-Dependent Manual
balance conditions.
IT-Dependent Manual
Application

amount and shares.
IT-Dependent Manual

IT-Dependent Manual
a timely basis.
IT-Dependent Manual
Exception reports received from clearing corporations are
reviewed daily
IT-Dependent Manual
Application
LoanNet or equivalent securities lending subledger is reconciled

to the general ledger with differences investigated and resolved
on a timely basis.
IT-Dependent Manual
Month-end reconciliation of subledger to customer/broker
statements is performed.
IT-Dependent Manual
performed.
IT-Dependent Manual
Manual Detect
Rebates are reviewed for reasonableness based on activity
IT-Dependent Manual

Application
IT-Dependent Manual
Manual Detect
individual.
IT-Dependent Manual
IT-Dependent Manual
ledger.
Application

Application
performed.
lines.
Application
IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Application

timely basis.
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
lines.
Application

IT-Dependent Manual

IT-Dependent Manual

Manual Prevent

Automatic reconciliation between the front-office system and
clearing broker is performed by the system.
Bank reconciliations are prepared and reviewed on a timely basis,
with differences investigated and resolved.
Application
Application
IT-Dependent Manual
IT-Dependent Manual

Reconciliation of trade blotter to sub ledger, general ledger and
stock record
Regular timely review of key operations risk indicators is
performed by appropriate personnel.
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
Application
Application

Application
Trade confirmations are electronically produced and sent to
customers.
Application
Manual Detect
individual.
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
depositories).
Instructions for trade allocations are independently verified to
customer instructions.
and approved
Month end reconciliation of subledger to customer/broker
statements
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

stock record
basis.
IT-Dependent Manual
IT-Dependent Manual
Application

Application
lines.
Application
System validates the completeness of data feeds from feeder
systems.
Application
Manual Detect
individual.
IT-Dependent Manual
Trades can be processed only for validated customer and/or
proprietary accounts.
Application
IT-Dependent Manual
Application controls within the trading system or order
management system are in place to ensure that the trades are for
valid securities.
Application
IT-Dependent Manual
a timely basis.
IT-Dependent Manual
System reconciles executed trades to electronic confirmations or
notice of executions received from the contra-broker or trading
system.
Application
Application
System will not allow duplicate trade ID or trade ticket numbers.
Application

Data feeds to subledger systems contain control totals, which are
reviewed.
Electronic funds transfer exception report is produced by the
system for rejected transactions.
balance conditions.
Proper authorization, testing and change procedures exist over
electronic funds transfer transactions.
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application
Application
Manual Prevent
Stock record is balanced daily and breaks are investigated timely IT-Dependent Manual
Transactions cannot be settled unless entered into the subledger
system
Application
balance conditions.
Exception reports received from clearing corporations are
reviewed daily.
Fails and operational suspense accounts are systematically aged
and aging is reviewed by management.
amount and shares.
and approved
IT-Dependent Manual
Application
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

IT-Dependent Manual
Regular timely review of key operations risk indicators.
IT-Dependent Manual

basis.
IT-Dependent Manual
a timely basis.
IT-Dependent Manual
depositories).
ledger.
performed.
a timely basis.
lines.
timely basis.
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
lines.
Application

IT-Dependent Manual

IT-Dependent Manual

timely basis.
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Management reviews assumptions supporting the liabilities.
Manual Prevent

lines.
systems.
IT-Dependent Manual
Application
Application

Application
IT-Dependent Manual
system.
Customer complaints are independently investigated and
resolved
a timely basis.
lines.
Vendor statements are reconciled to trade payables detail.
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Application
IT-Dependent Manual
Application
Application
IT-Dependent Manual

exposure limits
balance conditions.
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
Application
Application

Manual Prevent
IT-Dependent Manual
reasonableness.
IT-Dependent Manual
IT-Dependent Manual
changed.
Application
Application
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual

and approved
performed.
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
The back office system has a function that allocates the principal,
dividends and interest receipt to the respective customers'
accounts based on the stock record. Residual money or
securities are held in suspense or in an abandoned property
account.
Application
customers.
Application
Application

depositories).
Application

ledger.
Application

Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

Application
IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

reasonableness.
IT-Dependent Manual

IT-Dependent Manual

Application

IT-Dependent Manual

basis.
IT-Dependent Manual

Application

lines.
Application

Application

IT-Dependent Manual
Automated voluntary corporate actions is reviewed and approved. IT-Dependent Manual
Secondary review of notifications to transfer agents for nonautomated corporate actions to ensure they properly reflect
Manual Detect

depositories).
Application

ledger.
Application

IT-Dependent Manual
IT-Dependent Manual
Application
performed.
a timely basis.
lines.
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application

timely basis.
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
lines.
Application

IT-Dependent Manual

IT-Dependent Manual

Corporate actions periodically reviewed for authorization.
Manual Prevent
Manual Detect
IT-Dependent Manual
IT-Dependent Manual

system.
Manual Prevent
IT-Dependent Manual
resolved
IT-Dependent Manual

a timely basis.
lines.
Application
IT-Dependent Manual
Application
Application
IT-Dependent Manual

depositories).
Application

Application
Monthly reconciliation to Trustee/Paying Agent Statement
The back office system has a function that allocates the principal,
dividends and interest receipt to the respective customers'
accounts based on the stock record. Residual money or
securities are held in suspense or in an abandoned property
account.
exposure limits
Credit worthiness of existing counterparties is assessed
periodically.
Customer sale/investment recommendations are reviewed by
accounting and compliance function.
IT-Dependent Manual
IT-Dependent Manual
Application
Manual Prevent
Manual Detect
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
Manual Detect
Activity in the "hold mail" account is independently monitored.

Interruptions in normal statement delivery are identified and
investigated.
IT-Dependent Manual
Manual changes to statements require secondary approval.

Statements returned are investigated and resolved on a timely
basis.
IT-Dependent Manual
Activity in the "hold mail" account is independently monitored.

exposure limits
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
Customer addresses are validated and independently confirmed. IT-Dependent Manual

IT-Dependent Manual
Interruptions in normal statement delivery are identified and
investigated.
IT-Dependent Manual
Manual changes to statements require secondary approval.
IT-Dependent Manual
New accounts are approved by branch managers.

Statements returned are investigated and resolved on a timely
basis.
Manual Prevent
IT-Dependent Manual

Manual Prevent
Analytical procedures on balances by account type are prepared
timely and reviewed by appropriate personnel.
Application
Application

IT-Dependent Manual
Customer trading activity is monitored and logs are retained.
balance conditions.
Management compares financial statement disclosures to
underlying data.
performed.
IT-Dependent Manual
Order matching procedures are in place.
Application
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Partially and unsecured receivables are segregated on the

balance sheet and are reconciled with customer reporting system
or customer statements.
IT-Dependent Manual
Procedures are followed to ensure that statement errors are
monitored and corrected on a timely basis.
IT-Dependent Manual
Testing of house balances are performed comparing recorded
cash activity and security movements with banks and depositories
to actual activity and movement.
IT-Dependent Manual
The back office system calculates the market value of the
securities for each customer's account and determines the
securities that need to be segregated
Valid customer instructions are in place to hold-all-mail (holdout)
statements.
Credit checks and verification are performed.
Customer validation (i.e. social security number, background
check) is documented.
Independent customer validation/verification is performed.
New accounts are approved by branch managers.
Application
Application
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
Manual Prevent

depositories).
Application

ledger.
Application

Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

Application
IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

reasonableness.
IT-Dependent Manual

IT-Dependent Manual

Application

IT-Dependent Manual

basis.
IT-Dependent Manual

Application

lines.
Application

Application

IT-Dependent Manual

a timely basis.
System automatically submits lockbox and electronic funds
transfer cash feeds to the cash receipts application
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application

Application
IT-Dependent Manual
a timely basis.
IT-Dependent Manual
depositories).
ledger.
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application

Application
performed.
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
Application
lines.
Application
stock record
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
Application
Application

Application
customers.
Application
Manual Detect
individual.
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent

depositories).
Instructions for trade allocations are independently verified to
and approved
Month end reconciliation of subledger to customer/broker
statements
stock record
basis.
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application

Application
lines.
Application
systems.
Application
Manual Detect
individual.
IT-Dependent Manual
Trades can be processed only for validated customer and/or
proprietary accounts.
Application
IT-Dependent Manual
IT-Dependent Manual

a timely basis.
system.
resolved
a timely basis.
lines.
Data feeds to subledger systems contain control totals, which are
reviewed.
Application
IT-Dependent Manual
Application
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Application
IT-Dependent Manual
Application
Application
IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application

balance conditions.
Application
Manual Prevent
Stock record is balanced daily and breaks are investigated timely IT-Dependent Manual
Transactions cannot be settled unless entered into the subledger
system
Application
"Cancel/correct" trades are flagged once processed and
reviewed.
IT-Dependent Manual
IT-Dependent Manual

depositories).
Application
Application has an audit trail of all cancel/correct trade information
and that information is reviewed.
IT-Dependent Manual
IT-Dependent Manual
Daily investigation of new fails is performed
IT-Dependent Manual
amount and shares.
IT-Dependent Manual
IT-Dependent Manual
Independent function performs checks to ensure that the
aggregate trading limits are not exceeded.
IT-Dependent Manual
and approved
IT-Dependent Manual
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
individual.
IT-Dependent Manual

Manual Prevent

IT-Dependent Manual
timely basis.
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual

lines.
Application

IT-Dependent Manual

IT-Dependent Manual

Manual Prevent

stock record
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
Application
Application

Application
customers.
Application
Manual Detect

individual.
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Daily profit and loss (i.e. commissions, margin interest and
trading) and positions are reconciled
IT-Dependent Manual
IT-Dependent Manual
Open transaction details (i.e. fails, loans/borrow, repos/reverses)
are compared/confirmed (money and shares) with differences
researched and resolved.
IT-Dependent Manual
reasonableness.
IT-Dependent Manual
Supervisor review of all trade tickets with supporting
documentation
Unpriced securities are flagged in an unpriced report generated
by the system.
IT-Dependent Manual
IT-Dependent Manual
Application

IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual

exposure limits
balance conditions.
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
Application
Application

Manual Prevent
IT-Dependent Manual
reasonableness.
IT-Dependent Manual
IT-Dependent Manual
changed.
Application
Application
Manual Prevent
IT-Dependent Manual

depositories).
Application

ledger.
Application

Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

Application
IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

reasonableness.
IT-Dependent Manual

IT-Dependent Manual

Application

IT-Dependent Manual

basis.
IT-Dependent Manual

Application

lines.
Application

Application

IT-Dependent Manual
Application
IT-Dependent Manual

IT-Dependent Manual
a timely basis.
IT-Dependent Manual
System automatically submits lockbox and electronic funds
transfer cash feeds to the cash receipts application
Application
depositories).
ledger.
performed.
a timely basis.
lines.
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application
Application

timely basis.
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual

Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
lines.
Application

IT-Dependent Manual

IT-Dependent Manual

Manual Prevent

stock record
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Manual Detect
IT-Dependent Manual
IT-Dependent Manual
Application
Application

Application
customers.
Application
Manual Detect
individual.
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
System generated entries are in place to recognize revenue in the
period earned.
Application
Application
Advisory fees calculations are independently reviewed for

reasonableness.
reasonableness.
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

Management reviews and approves credit notes and invoice
adjustments prior to being recorded.
Written approval on vendor invoice by appropriate personnel
documents services performed.
All rebate calculations are reviewed and approved by appropriate
personnel.
Sales personnel create a rebates earned report, which is
reviewed by Inventory Accounting.
IT-Dependent Manual
Exceptions to 3-way match are investigated daily.

Proposed payment listing is reviewed and approved prior to
payments.
IT-Dependent Manual
Purchase price and quantity tolerances are specified within the

application to mitigate the risk of inaccurate receipt, invoice entry
and payment.
System matches purchase order, receiving report and invoice (3way match).
Aged report of open orders is reviewed and old/unusual items are
investigated.
Costs by department, division, etc. are compared to budget.
Manual Prevent
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
Application
Application
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Goods or services are promptly entered into the application when

received and the default application receipt date is the current
date.
Procedures are followed to ensure that when ownership passes
at shipment date, goods-in-transit are monitored.
Provision for goods received not invoiced is reviewed.
Purchase agreements are analyzed to identify when ownership
passes.
Application
IT-Dependent Manual
Manual Detect
Manual Prevent
System automatically records an entry based on 3-way match.

The application is configured so that goods or services are
accrued upon receipt.
Trade payables aging/subledger is reviewed and reconciled to the
general ledger.
Unmatched receiving reports are reviewed at period-end.
Unmatched vendor invoices are reviewed at period-end.
Application
IT-Dependent Manual
Hierarchies defined in the application automatically control the

purchase approval process.
Application
List of manual checks is reviewed for coding issues.
IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

payments.
Manual Prevent
Purchase orders require amount and coding approvals.
IT-Dependent Manual
System assigns coding for recurring payments.
Application
System assigns coding to purchase orders via the vendor and

item master files.
Application
System links purchases to fixed asset records.
Application
System is configured to input/total/calculate information correctly. Application

general ledger.
IT-Dependent Manual
IT-Dependent Manual

date.
Interplant movement during physical counts is reviewed for
compliance with written procedures.
passes.
Application
Manual Prevent
IT-Dependent Manual
Manual Prevent
Receiving log is reconciled daily to the system receiving report.

Receiving/shipping during physical counts complies with written
procedures.
IT-Dependent Manual
Unmatched purchase order reports are reviewed at period-end.

Unmatched receiving reports are reviewed at period-end.
Unmatched vendor invoices are reviewed at period-end.
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Exceptions to 3-way match are investigated daily.
IT-Dependent Manual
Manual Prevent
Application

date.
Application
Receiving log is reconciled daily to the system receiving report.
IT-Dependent Manual
Application

IT-Dependent Manual
System automatically posts subledger entries to the general
ledger.
Application
general ledger.
IT-Dependent Manual
Debit memos are systematically generated and reconciled to the

receiving report, invoice, PO and/or Trade payables Listing.
Debit memos require approval.
Asset acquisition records are compared to capital budget.
Asset records are periodically verified via physical observation.
Hierarchies defined in the application automatically control the
purchase approval process.
Interplant movement during physical counts is reviewed for
compliance with written procedures.
New vendor set-up is reviewed by control clerk.
System automatically generates POs sequentially.
System does not allow duplicate purchase order or invoice
numbers.
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Manual Prevent
Manual Prevent
IT-Dependent Manual
Application
Application
Application
The application is configured to restrict purchases, receipts and

invoices to defined suppliers in the vendor master and defined
goods and services in the item master file.
Application
general ledger.
IT-Dependent Manual
Vendor master file, including additions, is reviewed and approved. IT-Dependent Manual
IT-Dependent Manual
Asset acquisition records are compared to capital budget.
IT-Dependent Manual
Capital budget overages must be approved.
Manual Prevent
Capitalized interest calculation is reviewed.
Manual Prevent
IT-Dependent Manual
Work orders must be approved before contractors are paid.

Written procedures are followed to identify assumptions for fixed
asset capitalization.
Manual Prevent
IT-Dependent Manual
Disbursement requisitions for non-trade payables are reviewed. IT-Dependent Manual

Disbursements greater than specified amounts require additional
approval.
Application
payments.
Manual Prevent
IT-Dependent Manual
Manual Prevent

IT-Dependent Manual

passes.
Manual Prevent
IT-Dependent Manual

Manual Prevent

depositories).
Application

ledger.
Application
Application

IT-Dependent Manual
Fail reports are generated and exceptions are resolved on a
timely basis.
Application
performed.
lines.
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Application
Application
Unmatched purch. order reports are reviewed at period-end.
IT-Dependent Manual
Unmatched receiving documents are reviewed at period-end.
IT-Dependent Manual

IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

ledger.
Application

Application
performed.
lines.
depositories).
ledger.
Application
IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Application
Application
Application
IT-Dependent Manual
IT-Dependent Manual
Application

Application

performed.
a timely basis.
lines.
timely basis.
IT-Dependent Manual
IT-Dependent Manual
Application
Application
IT-Dependent Manual
Purchase orders require dollar-amount and coding approvals.
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual

timely basis.
IT-Dependent Manual

depositories).
Application

ledger.
Application
Application
IT-Dependent Manual

IT-Dependent Manual

Application

balance conditions.
Application

fees are changed.
Application
Application
IT-Dependent Manual

Application
Application

performed.
IT-Dependent Manual
Application

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual

a timely basis.
IT-Dependent Manual
lines.
Application

IT-Dependent Manual

IT-Dependent Manual

All purchases in excess of policy limits are authorized and
approved.
Disbursements greater than specified amounts require additional
approval.
Manual Prevent
IT-Dependent Manual
Application
Application
Manual Prevent
Purchase orders require dollar-amount and coding approvals.

IT-Dependent Manual
Application
System requires purchase order overrides to have proper

authorization.
Application

System will not post or accept a purchase order number more
than once.
Application

timely basis.
IT-Dependent Manual
Management reviews assumptions supporting the liabilities.
Manual Prevent
IT-Dependent Manual
Application
IT-Dependent Manual

IT-Dependent Manual
IT-Dependent Manual
system.
resolved
a timely basis.
lines.
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
Application
IT-Dependent Manual
Application
Application
IT-Dependent Manual
Application
IT-Dependent Manual

ledger.
Application
Application
performed.
lines.
Application
IT-Dependent Manual
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Application
Appropriate personnel compare the stock record security totals to

detailed transactions maintained in the respective subsidiary files. IT-Dependent Manual
Appropriate personnel recompute the netted values on a
counterparty or subsidiary basis according to the appropriate
netting agreement status, with differences investigated and
resolved.
IT-Dependent Manual
Assumptions used by traders in valuing financial instruments are
independently verified.
IT-Dependent Manual

Frozen pricing models are maintained and used by independent
pricing function.
Manual pricing performed by Traders is independently reviewed
for reasonableness.
Master Netting Agreements are reviewed and tracked.
Netted values on a counterparty or subsidiary basis are
recomputed according to the appropriate netting agreement
status.
reasonableness.
Product Controllers monitor counterparty netting
Securities in holders files are periodically repriced using monthend market data and CUSIP (Committee on Uniform Security
Identification Procedures) and SEDOL (Stock Exchange Daily
Official List) numbers.
The back office system calculates the market value of the
securities for each customer's account and determines the
securities that need to be segregated
by the system.
Assumptions used by traders in valuing financial instruments are
independently verified.
Manual pricing performed by Traders is independently reviewed
for reasonableness.
Master Netting Agreements are reviewed and tracked.
reasonableness.
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IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Application
Application
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
IT-Dependent Manual
Manual Prevent
IT-Dependent Manual
Product Controllers monitor counterparty netting
IT-Dependent Manual
Proprietary security pricing is compared to independent market

data, with exceptions (i.e. unpriced securities, significant price
movements) researched and resolved.
by the system.
IT-Dependent Manual
Application

IT-Dependent Manual
The sector matrices excel report is based on two matrices:

a) Significant Accounts and SCOT Matrix
b) Example Risk and Control Matrix
The following offers step by step instructions to prepare the Sector Matrices excel report using the Print Wizard functionality in
Significant Accounts and SCOT Matrix
a) Select Print Wizard from the Options menu
b) Choose Accounts>>Class of Transactions/Processes>>Applications in the Select option to print window.
c) Click the Select All button in the Select specific Accounts>>Class of Transactions/Processes>>Applications window.
d) Leave the Include properties for selected items radio box checked
e) Uncheck the Include sign-off, attachments and related items radio box
f) Select Print and an excel file open with extracted data from GAMx. (See format consideration section below)
Risk and Control Matrix

a) Select Print Wizard from the Options menu
b) Choose Class of Transactions/Processes>>WCGWs>>Assertions>>Risks>>Controls>>Test of Controls in the Select opt
c) Click the Select All button in the Select specific Transactions/Processes>>WCGWs>>Assertions>>Risks>>Controls>>Te
d) Leave the Include properties for selected items radio box checked
e) Uncheck the Include sign-off, attachments and related items radio box
f) Select Print and an excel file open with extracted data from GAMx. (See format consideration section below)
Format Considerations
From the Example Risk and Control Matrix excel file, insert a worksheet and cut and paste the Example Significant Accounts
Significant Accounts and SCOT Matrix
a) Delete all columns except for: Accounts, Class of Transactions/Processes, Transaction Type
b) Resize the columns to fit the page
c) Format the content to Wrap Text
d) AutoFilter the table in order to sort the data.
Risk and Control Matrix
a) Delete all columns except for Class of Transactions/Processes, Transaction Type, WCGWs, Controls, Control Type
b) Resize the columns to fit the page
c) Format the content to Wrap Text
d) AutoFilter the table in order to sort the data.
nt Wizard functionality in GAMx:
window.
pplications window.
ction below)
ontrols in the Select option to print window.

>>Risks>>Controls>>Test of Controls window
ction below)
ple Significant Accounts and Process Matrix content to that worksheet.
ols, Control Type

Sector Matrices - Banking and Capital Markets (Capital Markets)

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Format Tersedia

Sector Matrices - Banking and Capital Markets (Capital Markets)

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Format Tersedia

Sector Matrices - Global Banking and Capital Markets (Capital Markets)

Example Significant Account to SCOT Matrix

EZ. Underwriting and Syndicate Receivables

Investment Banking Activity

Record and Monitor Loans and Borrowings

Sector Matrices - Global Banking and Capital Markets (Capital Markets)

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process

Asset Management Fee Revenue Process