Credit card audit reports

Credit card audit reports

A credit card is a form of the payment card issued, to enable a cardholder to purchase products based on the promise made to the card issuer that the amounts used will be paid back along with other charges. The credit card system is one of the most used payment methods for buying goods or getting service.

Credit cards allow for the cardholders to build a continuous balance of debt that is subject to the interest being charged. Credit cards offer convenience and a high potential to have money in case you earn back some of the amounts you spend in rewards. The use of credit cards is also a means with which you can build a credit history if you practice healthy financial habits.

A credit card audit is used to evaluate the effectiveness of the card service provider to prevent fraud. The audit monitors fraudulent activities that may occur in the process of using the card and in the system that is intended to identify potentially illegal transactions. The audits may be done by checking the balance of each card compared with the receipts turned in with the credit statements.

During the credit card audits, various checks are made by an auditor who goes through the documents relating to the credit card transactions.

Credit card audit involves checking for-

  • The card issuance process to see if the legal steps were taken in the issuing of the credit cards.
  • The cardholder’s acknowledgment of the guidelines that have been put in place for the card use.
  • Disallowed purchases.
  • Spending limits.
  • Cardholder training
  • Penalties for violations.

After the audit investigation is concluded, a report is written which is usually the auditors’ opinion of whether the credit card use and issuance comply with the legal framework that has been set. It also contains recommendations of the steps that can be taken to correct the mistakes that may occur and suggestions for future preventative measures that may be taken to avoid the mistakes.

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