What is a Bank Transfer Schedule in Auditing?

A bank transfer schedule is used by auditors to test for the existence of kiting by a client. The schedule lists the details of all transfers to and from a client’s banks, as well as between the client’s banks. Withdrawal and deposit dates should have been recorded in the same reporting period to avoid the double counting of cash. Kiting is occurring if the same cash deposit is appearing in two accounts at the same time.

For example, the schedule should show instances in which a check was issued near the end of a reporting period and was not listed as an outstanding check in the bank reconciliation. As another example, the schedule should reveal cases where a deposit was sent to and received by the bank, and yet was still listed as a deposit in transit by the client. Both of these examples are instances of either deliberate or inadvertent kiting.

What is a Bank Transfer Schedule in Finance?

In finance, a bank transfer schedule refers to a fixed timetable of funds transfers between bank accounts. There are several reasons for having such a schedule, which are as follows:

For investment purposes. Funds may be aggregated into a single investment fund, from which an investment expert allocates the funds to the best possible investments, based on the liquidity and return requirements of the entity.
For payment purposes. Funds may be aggregated into a payments account, from which all accounts payable are paid. The same approach may be used to issue payroll payments to employees.
For cash extraction purposes. Some countries impose capital controls, so companies ensure that the bank transfer schedule removes the maximum amount that they are allowed to withdraw from these countries.

A bank transfer schedule may be employed only to shift funds between accounts at one bank, or to transfer funds between banks.