Banking has firmly embraced the Internet as a platform for the delivery of products and services to clients of the bank as well as prospective clients. Individuals apply for new bank accounts, credit cards, residential mortgages and personal loans through applications that are available on their websites. The use of the Internet has a twofold objective; to reduce costs and to increase client satisfaction. John Jones was looking to open a new personal chequing account. He accessed a number of bank websites including the Bank of Ontario. After making comparisons of each bank's service charges and the services attached to the account offering he decided to open a bank account with the Bank of Ontario (BOO). The BOO has an on-line account application that John accessed. After a brief review, he was comfortable that his personal information would be secure so he proceeded to complete the application. The BOO process for opening new accounts on their website was as follows: 1. The client completes an account opening form with the appropriate personal information; The form is completed and logged with the bank; 2. 3. The account application goes through a number of bank internal processes before it is approved; The client is then mailed a confirming letter with their account application information; 4. 5. The client must then visit a branch with appropriate documentation confirming their identity, address, etc. 6. After the client visits the branch an account is opened and the client is provided with an account number. John completed the account application, pushed the send button and off went the application. Some days later a letter arrived by mail confirming the receipt by the bank of John's application. In addition, John was asked to present himself with appropriate identification to the branch he had selected to do his banking. It was a busy time for John and he wouldn't be able to get to a branch for at least a few weeks after receiving the confirming letter. Before John was able to visit a branch, a bank statement arrived from the BOO. John reviewed the balance in the account, which was zero. John didn't think much of it and was surprised to receive a second bank statement. On this bank statement, there was a service charge for the account in the amount of $19.95, the standard monthly service charge. John filed the statement thinking this was just a mistake. He had never really opened the account and wasn't responsible for any charges. The next month a bank statement arrived in the mail with another service charge of $19.95. Now John had an overdraft on his account in the amount of $39.90. After the fourth month and another service charge, the bank overdraft balance was $59.85. What issues do the bank's auditors need to concern themselves with in this particular situation with regards to the issues noted below? Suggest some audit procedures appropriate to the circumstances. 1. Internal control; 2. Confirming the existence of account balances (approach to securing audit evidence); 3. The existence and ownership of bank assets.