Internal auditing, Investor accounting, The process of Remittance, Reconciliation and Reporting - Assignment Example

However, the 15th day may fall on a weekend or a holiday making the previous business end of the cycle known as the accounting cutoff. Reporting and remittance are necessary to be done accurately and timely (Jickling 2) Investor Accounting The investor reporting process is a bit different from the remittance process, and it is a process involving submitting of information to Penny Mac portfolio’s accounting activities. It is made up of both and interim and monthly processing. The accounting process cycle that is as earlier said from 16th to 15th determines the timing of the reports.

Reporting includes all the different loan-levels apart from third party foreclosure sales and payoffs. Interim reporting is done according to the type transaction with all interim reports being done under five business days. A report once done it is reviewed for any level of discrepancies through daily checks on the databases. The discrepancies thus noted are known as edits and they are made available on a daily basis to investors. Report revisions are allowed so long as they are identified as corrections in the transaction level.

The reporting of transaction corrections should not be made later than four business days before the end of the accounting cycle. Remittance Investor remittance is a process that involves the initiation of transferring funds from ones Penny Mac custodial account to that of Penny Mac. The funds are remitted through GPI that is easily accessible through mobile phones or through an Investor Accounting Manager (IAM). The timing of remittances as opposed to reporting which follows the accounting cycle, remittances is based on the option selected.

GPI is a third party vendor tasked with the gathering of finances on behalf of Penny Mac. The investor is provided for all portfolios with a toll-free remittance number and an identification number. Funds that are to be remitted by investors must be made available before or on the date due. Due dates might fall on a holiday or a non-working day; hence payment have to be paid on the previous business day and not later than nine p.m. Reconciliation Reconciliation of the monthly reports gives a summary of the activities that have been processed in the accounting cycle monthly of the Penny Mac individual portfolios.

The reconciliation reports thus compiled after thorough analysis are made available at the end of every month through the Service Loans applications and through an Investor Accounting Manager (IAM). This is done after the closure of all books and all the processed loan levels. The reconciliation reports thus arrived at after analysis is used in the custodial account reconciliation process. The monthly reconciliation reports to be reviewed during custodial account reconciliation process are the monthly account statement, the detailed adjustment report, and the loan reconciliation difference.

The Loan Reconciliation Difference Report is a detailed summary of all the transactions the system did not capture in the original cycle. The discrepancies are also arrived at from the daily edit reports. Monthly reconciliation reports are used in the custodial reconciliation in the following ways (U.S. Congressional Budget Office web). Firstly, the report is examined to determine any discrepancies between the Penny Mac system and the investor’s. Secondly, the investor corrects their system taking into account the