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DISCUSSIONS > IIA GENERAL DISCUSSION AREA [ REFRESH ]
Thread Title: banking limits
Created On Wednesday March 13, 2013 2:59 PM
  banking limits


outofbalance


Posts: 41
Joined: Dec 2008

Wednesday March 13, 2013 2:59 PM

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Hi, everyone.

I've always been a supporter of 'limits' or thresholds. Recently, I've noted that our newly acquired division in France had the CFO as a sole signatory in their banking resolution. There were 5 other signatories listed but they could only sign or approve jointly. In addition, the division also did not have limits set up for ALL of its signatories. I did review all the payments approved by the CFO and luckily, although he could approve solely, I did not find any disbursements with only a single approval.

I brought up the banking resolution issues (no limits/sole signatory) in the audit report and was glad that the resolution has been changed so that no individual could approve by himself. However, there were still no limits set up. When I asked the VP of Treasury, i was told that he does not think the limits are effective as he is sure that the banks do not check the limits anyway. As the VP is also in charge of all the other divisions outside France, I was told banking resolutions for other divisions in the UK and North America that currently have limits may be changed to have no limits at all as he is currently in discussion with our CFO.

I was wondering, is this really a common practice these days? If the bank does not check the limits and we have limits in our banking resolution, then the bank is liable in case the disbursement is fraudulent, isn't it? I still believe there should be limits but would like to hear other views.

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DISCUSSIONS > IIA GENERAL DISCUSSION AREA [ REFRESH ]
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