Actual Grades are based on Findings arrived at on a weighted basis.
Level 1: No Major Findings, Minor Findings, Recommendations or Comments.
Level 2: One or two Minor Findings only, and any Recommendations or Comments.
Level 3: Three or more Minor Findings and any Recommendations and/or Comments.
Level 4: One Major Finding and any Minor Findings, Recommendations or Comments
Level 5: Two or three Major Findings and any Minor Findings, Recommendations, or Comments.
Level 6: Four Major Findings and any Minor Findings, Recommendations or Comments.
Level 7: Five or more Major Findings, Recommendations or Comments.
Level 8: Five or more Major Findings, Recommendations or Comments and numerous breaches of bank policy and/or compliance violations.
Level 9: Possible substantial loss of income.
Major Findings include violations of bank policy, improper accounting procedures, violations of internal control and security problems, violations of regulations, potential loss of income, extreme deviations from the expected error rate on sample testing, and wasteful use of assets.
Minor Findings include insignificant dollar variances, footing errors, typographical errors, and a small number of procedural errors in relation to the sample.
Recommendations cover something that, in the auditorís opinion, is still to be done and situations in which improvement in the operation is possible.
Comments cover situations that cannot be covered under Findings or Recommendations, including instances in which the Audit Division feels that management should be apprised of the situation, yet no bank policy or procedure has been violated or no Recommendations can yet be formulated. No recommendations are made in this category.
<Source> Warren, Gorham & Lamont - Bank Internal Auditing Manual (modified a little bit)