Monday, October 15, 2012


Statutory audit

The audits of banks have been a significant professional opportunity for a large number of Chartered Accountants Firms. The Government of India has now in principle decided to withdraw the power of bank management to appoint statutory auditors. A committee consisting of nominees from Government of India and CAG, with an approval of Reserve Bank of India will appoint Central Statutory Auditors. The modus operandi and the criteria of selection are being finalized. The appointment of branch auditors is also being expected on the same lines. The proposed system of appointment of statutory auditors of bank shall ensure transparency, fairness and equity.

Concurrent audit

The government of India has recommended that for all concurrent audits Chartered Accountant Firms should be appointed from the RBI Panel as per the gradation based on the size of the branch. The remuneration for concurrent auditors has been recommended to be enhanced adequately based on coverage of audit, quality of audit; skill set required, number of staff etc. It has been noted by the
government that the current fee scale paid for concurrent audit is too low and need rationalization to ensure quality. It is also recommended by Reserve Bank of India that a larger number of branches need to be covered under the concurrent audit.

The profession has to prepare itself to address the needs of these assignments, to deliver its best and to ensure value addition in the process.

Risk Based Internal Audit

Reserve Bank of India as well as Government of India are of the view that risk based internal audit is the need of the hour and should be carried out in all branches uniformly between 9 months to 18 months depending on degree of risk involved. ICAI need to develop a framework and programme for banks and also train our professional CAs to effectively and efficiently undertake this.

Internal inspections

The government has also recommended that the internal inspection, risk management and surveillance department should be strengthened by appointing more and more chartered accountants and other financial professionals. This shall be a good employment opportunity for young CAs who

wants to make banking as their forte.

Expectations from bank auditors

The government as well as RBI are very keen to ensure that the quality of statutory audit and its value addition to the banking sector should increase significantly. It should ensure proper financial discipline as well as risk management. The banks are making significant efforts to streamline centralized banking system (CBS) over a period of next few years so that the audit function can be rationalized meeting the requirements of the banks and ensuring adequate professional audit to
ensure that a strong audit system and an effective internal audit mechanism work as a strong deterrent and preventive mechanism for fraud. The Institute and the profession are fully committed and
geared up to meet new challenges and opportunities and to tackle the changing scenario more effectively.


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