Have a clear understanding of the scope and nature of
assignment.
Study the Account closing Circular, intimation from HO on
the scope of the audit and Instruction on completion of
the audit, Manual of instructions of the bank and
circulars issued during the year.
Follow the instructions fully given by HO while intimating
appointment, in
ensuring a speedy conclusion.
P.R. Suresh - Hyderabad Branch - 24.03.2015
Obtain a copy of the published accounts of the bank and go through the
accounting policies and other disclosed policies.
Ensure that these accounting policies are implemented by the branch.
Wherever
these are not followed, the same should be qualified in the branch
auditor's report. Refer to the same in LFAR where questions are asked
on the adoption of accounting policies.
It is better to complete all the work at the branch, and hand over all the
statements & reports to the branch manager and obtain
acknowledgement for files.
There will be pressure to do a quick, haphazard job. Resist such
pressures and do a efficient and speedy branch audit.
P.R. Suresh - Hyderabad Branch - 24.03.2015
Income Recognition
Recovery Policy
Four way Classification
Financial Statements
Agricultural advances
System based NPA determination
P.R. Suresh - Hyderabad Branch - 24.03.2015
Physical verifications :
Cash Verification, unused valuable stationery, jewel held as
security for jewel loans, loan against deposits
Major customers with working capital limit unit visit
Cash in ATM
Jewel loans
Loan against deposits
P.R. Suresh - Hyderabad Branch - 24.03.2015
Premises – Rental increase / pending approval – Contingent
liability – accrued liability
Bank Guarantees Invoked / Letter of credit devolved closer
to balance sheet date – reporting of contingent / clear
liability
P.R. Suresh - Hyderabad Branch - 24.03.2015
Others :
Bank Reconciliation Statement – old items pending adjustment
Fixed Assets – FA register
Physical verification
Date of Asset put to use
Assets pending capitalization
Damaged / Discarded Assets
/ clear liability
P.R. Suresh - Hyderabad Branch - 24.03.2015
Details of Expired BG / LC’s
Sundry Deposits items
Test Check of Interest on Deposits
Test Check Interest on Advances
Year end provisions – rent, telephone, security, electricity,
communication expenses, leave travel etc.,
Income on Commission etc for more than the year under audit.
P.R. Suresh - Hyderabad Branch - 24.03.2015
Legal Expenses
Interest on Overdue deposits
TDS on Provision of Interest on Overdue Deposits
Comparitive Analysis of Current year P & L and B/s With
Previous year
P.R. Suresh - Hyderabad Branch - 24.03.2015
Long Form Audit Report – Issues for consideration and
requirements
Credit Appraisal
Sanctioning / Disbursement
Documentation
Review / Monitoring / supervision
Annexure to LFAR for advances above 2 Crores – Auditors
duty
P.R. Suresh - Hyderabad Branch - 24.03.2015
Tax Audit : - TDS on provision for interest 40 (a)(i)(a) &
under TDS
Depreciation w.r.t. Depreciation Accounting
Clause 34a of tax audit report – mapping and reporting
TDS refunds and Form15G & 15 H
P.R. Suresh - Hyderabad Branch - 24.03.2015
ALM
12 Odd Dates
Capital Adequacy Ratio
Ghosh Committee Report / Jhilani Committee Report
P.R. Suresh - Hyderabad Branch - 24.03.2015
PMRY Certificate
DICGC Certificate
Confirmation that MOC’s of earlier year passed
P.R. Suresh - Hyderabad Branch - 24.03.2015
RBI Circulars
1.
2.
3.
4.
5.
6.
Prudential norms on Income Recognition, Asset
Classification and Provisioning pertaining to Advances
Loans and Advances – Statutory and Other restrictions
Interest Rate on Advances
Banks Finance to NBFC
Disclosure in Financial Statements – Notes to Accounts
Prudential Norms on Capital Adequacy – Basel I
P.R. Suresh - Hyderabad Branch - 24.03.2015
.7 Housing Finance
8. Guidelines for Relief Measures By Banks in areas affected
by natural calamities
9. Frauds – Classification and Reporting
10. KYC Norms / Anti Money Laundering AML standards /
Combating of Financing of Terrorism (CFT)/ obligation
of banks under PMLA, 2002
11. Lending to Priority Sector
12. Lending to Micro, Small & Medium Enterprises
13. Wilful Defaulters
14. Priority Sector Lending – Targets
15. Basel III Capital Regulations
P.R. Suresh - Hyderabad Branch - 24.03.2015
Service Tax rate credits / filing of ST-3. / reverse charge
mechanism
Special Mention accounts / Weak Standard Assets /
Potential NPA Advances list – control return
Assigned Limits – Agricultural branches – accounting
treatment – role of auditors.
Fraud by or against the bank
P.R. Suresh - Hyderabad Branch - 24.03.2015
Credit card dues – debit balances in savings bank accounts.
Provision for Restructured Assets
Certificate of Lending to Sensitive Sector
Interest Sub vention – Agricultural advances
Interest Sub vention – Technology Upgradation Fund Scheme
Interest sub vention – Housing Loans below Rs.10 Lakhs
BS-8 Provision for sacrifice
P.R. Suresh - Hyderabad Branch - 24.03.2015
Anti Money Laundering & Suspicious transaction reporting
Customer id – splitting – duplication
P.R. Suresh - Hyderabad Branch - 24.03.2015
Pre audit communication with branch
Audit Program
Management Representation Letter
Documentation in audit
Discuss Issues with branch management
Peer Review Requirements
P.R. Suresh - Hyderabad Branch - 24.03.2015
Thanks to each one of you for the special opportunity to
interact and learn from this experience
Members of the Hyderabad branch have always been sharp,
erudite and quite a fun to address and become
knowledgeable
Special thanks to the Chairman Raghunandan for inviting
me
I can be contacted at suresh@chandranandraman.com or
9845058988
P.R. Suresh - Hyderabad Branch - 24.03.2015
I can be contacted at
suresh@chandranandraman.com
or
9845058988
THANK YOU ONCE AGAIN
P.R. Suresh - Hyderabad Branch - 24.03.2015