Policy for Appointment of Statutory Auditors 2013
BANK OF BARODA
CORPORATE OFFICE
BARODA CORPORATE CENTRE,
BANDRA KURLA COMPLEX, MUMBAI
Policy for appointment of Statutory Auditors:
Appointment of Statutory Auditors (Statutory Central and Statutory Branch
Auditors) is being done on the basis of guidelines issued by Government of India/
Reserve Bank of India from time to time.
1.00 Appointment of Statutory Central Auditors (SCAs):
1.1 Number of Audit Firms
The number of SCAs are decided by Government of India /Reserve Bank of India.
As per extant guidelines, the number of audit firms to be appointed as SCAs is
determined on the basis of the size of the Banks.
Category of Bank
Large Banks
Medium Banks
Small Banks
No. of SCAs required
Not more than 6
Not more than 5
Not more than 4
Presently, the number of SCAs in our Bank are – 6 -.
As per the guidelines of Government of India, the bank can go for less than 6
numbers of SCAs. However, looking to the size of our Bank, we will continue to
appoint 6 firms of SCAs as this will help in distributing the work amongst the 6
SCAs. The total fees for SCAs are dependant on the total number of branches,
advances etc. hence there will no effect on the fees even if the number of auditors
are reduced.
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
1.2 Eligibility of Audit Firms
At present, eligibility norms as advised by Reserve Bank of India are as
under:1.
minimum 7 full time chartered accountants, of which at least 5 should
be full time partners exclusively associated* with the firm. These
partners should have minimum continuous association with the firm i.e.
one each should have continuous association with the firm at least for
15 years and 10 years , two with a minimum of 5 years each and one
with a minimum of one year. The remaining 2 full-time chartered
accountants or partners, as the case may be, should also have a
continuous association with the firm for a period of one year. Four of
the partners should be FCAs. Also at least two of the partners should
have minimum 15 and 10 years experience in practice. In case the paid
Chartered Accountant available with the firm without any break was
admitted as a partner of the said firm at a future date, his association
with the firm as a partner will be counted from the date of his joining the
firm as a paid Chartered Accountant.
*Note:
1. The definition of ‘exclusive association’ will be based on the following criteria:
(a) The full time partner should not be a partner in other firm/s.
(b) He should not be employed full time / part time elsewhere.
(c) He should not be practicing in his own name or engaged in practice otherwise or
engaged in other activity which would be deemed to be in practice under Section 2(2)
of the Chartered Accountants Act, 1949.
(d) The total compensation@ of the partner from the firm should not be below the
following limit:
In case the Head office of the firms located in
(i) Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad
ACA partner
` 1.80 lakh in a year (` 15000/- per month)
FCA partner
` 3.00 lakh in a year (` 25000/- per month)
(ii) Other places:
ACA partner
` 1.20 lakh in a year (` 10000/- per month)
FCA partner
` 1.80 lakh in a year (` 15000/- per month)
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
(e) A partner whose total compensation@ from the firm is less than the following will
not be treated as exclusively associated with the firm :
Firms having more than 14 partners
1%
Firms having 10 to 14 partners
3%
Firms having 5 to 9 partners
5%
Firms having less than 5 partners
8%
@Total compensation =Sum total of share of profit, remuneration and interest on
capital.
2. Out of the 7 full-time chartered accountants, the remaining two
chartered accountants/partners (besides the 5 exclusively associated
partners) will be treated to be exclusively associated with the firm only if
they are continuously associated with the firm for a period of one year
as on January
1 of the relevant year. These norms will be made
applicable from the financial year 2014-15 i.e. the chartered
accountants/partners will have to comply with the norms as on January
1, 2014.
2.
The number of professional staff
(excluding typists, stenographers,
computer operators, secretary/ies and sub-ordinate staff etc.) consisting
of audit and articled clerks with the knowledge in book-keeping and
accountancy and are engaged in outdoor audit should be minimum18.
3.
The standing of the firm should be of at least 15 years, which would be
reckoned from the date of availability of one full time FCA continuously
with the firm.
4.
The firm should have minimum statutory central audit experience of 15
years of public sector banks (before or after nationalisation) and/or by
way of statutory branch audit thereof or that of statutory audit
experience of a private sector bank. In case any of the partner of an
audit firm is nominated / elected for a period of at least 3 years or more
on the Board of any public sector bank then his / her such experience
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
for a maximum period of three years will be considered as bank audit
experience, provided such experience has not been earned by him/her
concurrently i.e. when his / her firm was assigned statutory audit of any
PSB, select all India financial Institutions or RBI.
5.
The firm should have statutory audit experience of at least 5 years of
the public sector undertakings (either Central or State Government
Undertaking). While calculating such experience, more than one
assignment given to a firm during a particular year or more than one
year’s statutory audit (audits in arrears) assigned to the firm will be
reckoned, as one year experience only, for the purpose of counting
such experience.
6.
At least two partners of the firm or its paid Chartered Accountant must
possess CISA/ ISA or any other equivalent qualification.
Apart from the above,
1. The eligible Auditors / Audit Firms should be qualified under provisions of
Section 226 of Companies Act, 1956 for appointment as Auditors of the
Bank. No adverse remarks / disciplinary proceedings pending / initiated
against the Firms / any of its Partners / Proprietor on record of Institute of
Chartered Accountants of India.
2. The Auditor / their relatives should not be indebted to the Bank.
3. The Auditors / Audit Firms should not be a willful defaulter of any other
Bank / Financial Institutions.
4. The Auditors / Audit Firms should not carryout any assignment of the
internal audit of the Bank at the time of giving consent to act as Statutory
Central Auditor.
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
5. The Auditors / Audit Firms should not enter into sub-contract of the Audit
assigned to them.
6. The Audit firm should have subjected itself to Peer Review System of the
Institute of Chartered Accountants of India and hold a valid Peer Review
Certificate.
1.3 Procedure for Selection and appointment of SCAs.
From the financial year 2013-14, selection of SCAs will be done by the Selection
Committee constituted by Government of India and the procedure that will be
followed by RBI for forwarding the list of eligible audit firms for selection of SCAs
by the Selection Committee constituted by GoI is as under :

After receipt of the list of eligible auditors / audit firms, based on the
eligibility norms for empanelment of auditors / audit firms prescribed by RBI
from the Office of the Comptroller and Auditor General of India (C&AG),
verification of eligibility of audit firms by RBI with respect to their bank audit
experience available with RBI will be done by RBI.

List of eligible firms after excluding the firms which are to be continued,
rested and denied audit during the relevant year will be prepared by RBI
and forwarded to Government of India for selection by the Selection
Committee.

After selection, Government of India will advise bank-wise names of the
selected firms to the respective banks.
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
After receipt of the name(s) from Government of India, Bank will

Forward the name(s) to RBI for its approval.

On receipt of approval of RBI, the names will be placed before the
Chairman & Managing Director/Executive Director for recommending to
ACB / Board for approval, to fill up the required number of vacancies for the
year.

Issue appointment letters to SCAs, after getting approval of Audit
Committee / Board.
1.5 Tenure of Appointment
SCAs appointed will have a maximum tenure of three years subject to annual
approval by the Board and Reserve Bank of India. The appointment of SCAs will
be made on an annual basis, subject to their fulfilling the eligibility norms
prescribed by RBI from time to time and also subject to their suitability.
1.6 Fees payable to Statutory Central Auditors
The fees payable to Statutory Central Auditors will be as per Reserve Bank of
India guidelines
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
2.00 Appointment of Statutory Branch Auditors (SBAs):
2.1 No of Audit Firms
No. of audit firms depends on number of branches to be covered under audit as
per Government / RBI policy and the allotment criteria advised by Government /
RBI from time to time.
2.2 Eligibility of Audit Firms
At present, eligibility norms as advised by Reserve Bank of India are as under:Categorization Norms applicable for empanelment of audit firms to be
appointed as Statutory Branch Auditors.
Professi
onal
staff
Bank audit
experience
Standing
of the
audit firm
(2)
No. of
partners
exclusivey
associate
d with the
firm (full
time) (Out
of 2)
(3)
(4)
(5)
(6)
I.
5
3
8
The firm or at least 8 years
one of the partners
should
have
a
minimum of 8 years
experience of branch
audit
of
a
nationalised
bank
and / or of a private
sector bank.
II.
3
2
6
The firm or atleast
one of the partners
should
have
preferably conducted
branch audit of a
nationalised bank or
of a private sector
bank.
Category
No. of CAs
exclusively
associated
with the
firm
(Full time)
(1)
6 years
(for the
firm or
atleast one
partner)
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
III.
2
1
4
The firm or atleast 5 years
(for the firm
one of the CAs
or atleast
should
have one
partner)
preferably
conducted
audit
branch
of
a
nationalised
or
of
sector
a
bank
private
bank
for
atleast 3 years
IV.
2
2
2
Even proprietorship concern without
bank audit experience may be
considered
as
hitherto.
(The
proprietary concerns of Chartered
Accountants with 1 paid CA, 2
professional staff and not having any
statutory branch audit experience of a
nationalised bank or of a private
sector bank, will be treated at par with
the partnership firm after deducting
their 3 years seniority from the date of
their establishment).
3 years
Not necessary
The selected audit firms should also satisfy the following conditions:
1. Eligible Auditors / Audit Firms should be qualified under provisions of Section
226 of Companies Act, 1956 for appointment as Auditors of the Bank. No
adverse remarks / disciplinary proceedings pending / initiated against the
Firms / any of its Partners / Proprietor on record of Institute of Chartered
Accountants of India.
2. The Auditor / their relatives should not be indebted to the Bank.
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
3. The Auditors / Audit Firms should not be a willful defaulter of any other Bank /
Financial Institutions.
4. The Auditors / Audit Firms should not carryout any assignment of the internal
audit of the Bank at the time of giving consent to act as Statutory Branch
Auditor.
5. The Auditors / Audit Firms should not enter into sub-contract of the Audit
assigned to them.
2.3 Procedure for appointment :
o Select the audit firm to the extent possible taking in to consideration their
category and size of the branches in such a way that there is proper mix of
audit firms from all the categories and bigger branches are allotted to
higher category of audit firms.
o Shortlist the audit firms from the list of New auditors and take consent /
undertaking from the firm for appointment as SBA.
o The consent given by an audit firm for consideration of appointment in the
Bank for the particular year and the subsequent continuing years. The
consent so obtained are treated as irrevocable and request, if any, from the
audit firm for changing the Bank after giving the consent are not
entertained.
o To send list of continuing SBAs and new SBAs selected to RBI for their
approval.
o To recommend the total number of SBAs and their name to Chairman and
Managing Director/ ACB/ Board for approval.
o To issue appointment letters on receipt of approval from RBI /ACB / Board.,
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
2.4 Procedure for selection:

Corporate Accounts & Taxation Department to finalise the zonewise /
categorywise number of vacancies of SBAs.

Corporate Accounts & Taxation Department segregates the continuing
SBAs zone wise and finalise the additional number of SBAs required in
each Zone to meet the total Bank’s requirement.

Corporate Accounts & Taxation Department provides list of new SBAs
received from RBI to the Zones, having office in their respective Zone along
with category wise new SBAs required to be appointed with a request to
select the firms based on geographical area and obtain irrevocable consent
from such identified firms.

Zonal Offices to select / finalise the SBAs by constituting a Committee
consisting of Deputy Zonal Head and one Executive/ Senior Officer. The
Committee while finalizing the SBAs should ensure that out of the list of
Auditors provided by RBI, Local Auditors firm are preferred to contain the
cost.

In case sufficient number of local audit firms are not available, auditors
from nearby place within the state / adjoining state/ other state should be
considered.

Zones to submit the list of Audit firms selected by them to Corporate
Accounts & Taxation Department for its concurrence before taking
irrevocable consent from selected SBAs.
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013

On approval by the Corporate Accounts & Taxation Department, Zones to
obtain irrevocable consent letter from selected/ identified SBA firms and
forward the same to Corporate Accounts & Taxation Department for
submitting them to Reserve Bank of India for approval.
On receipt of consent from required number of audit firms, Corporate Accounts &
Taxation Department will recommend the same to RBI for final approval and place
a Note before Chairman & Managing Director / Executive Director for
recommending to ACB / Board for approval of names and number of SBAs. After
obtaining the approval from ACB / Board, appointment letters will be issued. In
case of time constraint, the approval may be obtained from Chairman and
Managing Director and may be placed before ACB / Board in subsequent
meetings, for confirmation of action of Chairman and Managing Director.
2.5 Tenure of Appointment
SBAs appointed will have a maximum tenure of four years subject to annual
approval by the Board and Reserve Bank of India. The appointment of SBAs will
be made on an annual basis, subject to their fulfilling the eligibility norms
prescribed by RBI from time to time and also subject to their suitability.
2.6 Fees payable to Statutory Branch Auditors
The fees payable to Statutory Branch Auditors will be as per Reserve Bank of
India guidelines
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com
Policy for Appointment of Statutory Auditors 2013
4.0 OTHERS
4.1 Redressal of grievances :
General Manager (Corporate Accounts, Taxation & Subsidiaries) and CFO will
dispose off grievances/ complaints (if any) with regard to the selection of Statutory
Central Auditors or Statutory Branch Auditors and allotment of Branches to them.
Bank reserves the right to amend the policy from time to time.
************************************
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Corporate Accounts & Taxation Department, 2nd Floor, Baroda Corporate Centre, Bandra (E), Mumbai 400 051.
Tel No. 022 66985272, 66985276, 66985280
email id : accounts.ho@bankofbaroda.com