The report of the national bank examiner is made to the Comptroller of the Currency and is seldom, if ever, seen by the officers of the bank. Yet it is the officers and directors who are held responsible if anything goes wrong with the bank. Most banks, at least those in the large cities, find it advisable, therefore, to have a thorough examination made by expert accountants or auditors employed by the stockholders or board of directors and reporting to them. The principal feature of the official examination is the appraisal of the bank's assets to determine its solvency. As a result of such examination the bank may be advised by the Comptroller or by the state banking department to reduce or "write off" some bad debt, but it seldom gets any suggestion for an improvement in its accounting system. The expert accountant, on the other hand, is not concerned primarily with the appraisal of assets; his duty is to ascertain and report the exact condition of the affairs of the bank. By so doing he paves the way for changes in the accounting-system where it is necessary and for other improvements which will further safeguard the interests of stockholders and depositors.1
The Comptroller of the Currency for years has been urging the directors of national banks to supplement the work of the examiner with examinations by a committee of the directors, and he has submitted suggestions as to the points that such examinations should cover. Some banks have a system of internal examinations by committees made up from their own clerical force. Clerks are selected who have no part or responsibility in the work of the particular department to be scrutinized, and who carefully examine all the books, records and details of the department to ascertain how accurately and efficiently the work is being done. In order to keep the clerks constantly alert and up to their work some banks have a practice of shifting them from one division of the ledgers to another.
1Moxey: Practical Banking, p. 233.
In several of the large cities the clearing house association employs independent examiners who periodically make searching examinations of the affairs of member banks.