35 Audit Prgrams Bank Concurrent Audit

8/12/2019 35 Audit Prgrams Bank Concurrent Audit ...

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Sr.

No.

Area Sub-area Bud.

Time

Act.

Time

Name Remar

1 Legalrequirements

as toappointment

1. Acceptance of Appointment2. Communication with previous auditors in case of 1st year of audit.

2 Briefing by

PC

! "eview of last

year#s file

1. Business process

2. $eneral observations

!. Critical issues of P%

& "eview of

'(P system

INTERNAL CONTROL & INTERNAL CHECKS

a) *nderstand the accounting software

b) *nderstand code assigned for various nature of transaction andchec+ that it is followed by the Branch during the period under

Audit.

c) ,erify ' ( P chec+s for the following-i. imely recording of transactions

ii. /atching the balances with the control ledger and general

ledger.iii. ransaction in foreign currency should be recorded as per the

guidelines issued by "B 0 '(A

d) List out the control register generated by the system

e) Chec+ how often it is balanced. dentify the person responsible for

balancing.

f) ee that subsidiary register generated by the system are balance bythe system and recorded properly in the boo+s of account. Also

note the period by which the subsidiary register is balanced.

3 "eview of

internalcontrol

STRUCTURE O BRANCH

a) 4btain the 5etwor+ of the Ban+0Branch along with list of offices.b) dentify the 6ead and audit co7ordinator at each branch 8Along

with address and contact 5o etc.)

c) 4btain organisation structure along with 5ature of responsibility

and authority given to each /anager 0 officer with sanction limit.

i. A brief 9ob7profile of +ey officers: if available: should be

obtained from the ban+

ii. eam member should see that +ey officers and manager have

functioned according to authorities granted by the

management


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RE!IE" O !ARIOUS RE#ORTS

/a+e note of important issues and stand ta+en by ban+ during the

relevant period for the observation made from the following-

. nternal audit report

. ncome ; 'eigh if necessary.!) "eceipts Cash Boo+-

est chec+ total for the last two days.

&) Payment Cash Boo+-

est Chec+ total for the last day. ee voucher for any big payment.

3) Chec+ the totals of cost counted with -

. Cash Boo+

. $eneral ledger Balance.

. Cash Balance Boo+?) oreign Currency 5otes to be verified by actual inspection. ee

that these currencies are translated at '(A rate at year7end.=) @eep on record a statement of cash ,erification.

) Chec+ any petty Cash mprest +ept at the Branch.

) >hat is the chec+ on Cash (ouble loc+: arrangements for

custody etc. 8 s it in the 9oint custody of two or more person

1D) ee that no private cash is lying in the safe.

11) ee that cash is being chec+ed daily by Cashier. Periodically thisshould be chec+ed by an authoriEed officer. his would be duly

evidenced in the "egisters. f not done report.

12) "eview the procedures for duplicate +eys and see whether it is

adequate.

1!) '


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&) 'nsure that there are no old reconciliation items.

!ERIICATION O CASH IN TRANSIT$

Chec+ with relevant advice#s available at branch.

=.! Ban+ Balance !ERIICATION O BALANCES "ITH OTHER BANKS$

1) ee the balance confirmation certificates.2) est Chec+ "econciliation entries for the last day.

!) 'nsure that there are on old reconciliation items.!ERIICATION O BALANCE "ITH RBI SBI.

1) ee the balance confirmation statement at the year7end.

2) ee the reconciliation statement and report as under-

a) Cash transaction remaining unresponded by Ban+.

b) "evenue item requiring write off 0 Ad9ustment

c) 4ld une


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branch is opened it has to record the capital ehere hard care entries persist: consider need for write off0write bac+.

INTER BRANCH RECONCILIATION$

nter7branch reconciliation is done in two stages 7 branches within a

local center and for other branches. wo accounts are queries or

pending unreconciled items are promptly attended. 4btain agecomposition of unreconciled inter 7 branch items. 'nsure that

appropriate and timely action is ta+en to trace causes of outstanding

entries. /onitor progress achieved in ad9ustments.

=.= (eposits he above fall broadly into the following categories-

A. avings Accounts 0 "ecurring (eposits etc.

B. Current Accounts and Contingency Accounts.

C. i


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customers about mista+es in the same dealt with. f any file is

+ept for complaints: e


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particulars of security: if any: possibility of the ban+ having to

meet the obligation provision necessary in your option in regard

to the same 8if any) etc.

?) '


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=.12 4ther Assets AU%IT O STA CUSTO%3 TRANSACTIONS$

*nder this head: the shares: bends: $overnment papers: parcels:

pac+ages: etc. are +ept by the customers with the ban+ for safe custody

against a nominal charges. he contents of such pac+ages are entered

in the safe custody "egister customer wise against which a receipt is

issued to the customer in the articles received: whenever the articles

are delivered bac+ safe custody "egister is issued to the customer inac+nowledgement of the articles received whenever the articles are

delivered bac+ to the customer. A mention thereof made in the safe

custody "egister. est chec+ a few items.a) afe Custody register: the pac+age etc. received from the customer.

b) or items covered in test chec+7where the sealed parcels 0 envelops:

etc. are received from the customers: see that the customers seal is

intact. he seal: in such case should not be bro+en to verify the

contents of the pac+ages. But where the seal is put by the safe

Custody "egister by brea+ing open the seal in a few cases.

c) ee that the collection of charges from the customers for +eeping

the securities in safe custody with the ban+ is made regularly and isfully accounted for in the boo+s.

ollowing types of transactions are also monitored by the branch-

i) Audit of PP transactions

ii) Audit of other government business

iii) Audit of nterest a< returns

) 5AL "','> 4 B"A5C6 BALA5C' 6'' ; $55$

) P"'PA"A45 4 4B'",A45 "'P4") '5*"' ALL A'/'5 A"' P"4P'"L% LL'( 5-

1) Long form I Audit "eport

2) Anne


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=.1! (ocumentatio

n

A%!ANCES$

,erify documents and securities for advances granted during the year.

1) ee that documents mentioned in the sanction letter are obtained

duly signed by the borrowers: guarantors or as the case may be.

2) ecurities as stipulated are obtained along with the related

documents.

or '


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value of security and outstanding balance not recovered by the

security value.

?) List of suit filed cases with value should be obtained to see that

the amounts for which suits are filed are not less than those

appearing in the accounts.

=) 'ach case where decree has been obtained should be e


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responded by credit to mirror account and the contra debit is to the

appropriate account

?. hat interest is collected in accordance with '(A "ules from

the date of debit to the 5ostro Account

=. hat the letter of credit liability is reversed on retirement of bill

#RE-SHI#5ENT INANCE$

1) hat pac+ing credit facility is allowed against lodgment ofirrevocable letters of credit or firm e


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negotiation 0 collection with the stipulated period of 21 days from

the date of the shipment.

&) hat the usance bill are being properly stamped before leaving

ndia and are for periods permissible under '(A "ules and

'


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Verify Advances granted / disbursed during the year on the following

lines:

'


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power or are against unapproved securities or the insurance cover

is inadequate or are otherwise irregular should be noted and

reported.

h) ee that periodic statements are in line with "B06.4

requirements.

i) ee that the toc+ 0 Boo+ debts: /4( statements etc. are

obtained by the branch periodically .he Limits of the borrowerhas to be revised based on the figures submitted in above periodic

statement.

9) n case of Advance0limits of "s are 1D07 Lacs and above is grantedto non7corporate entities: ee that "B guidelines regarding

compulsory audit is complied with.

+) ,erify the calculation of (C$C 0 'C$C claim lodged by the

ban+.S1ecia) 1oi'ts o' ,eriicatio' o Bi))s 1urcased a'd discou'ted.

1) ,erify all documents of title which are assigned to Ban+

2) ,erify the percentage of margin +ept by the ban+. he margin

+ept by the ban+ should be predetermined and should not bechanged from borrower to borrower.

!) ee that immediate steps are ta+en to recover the amounts if Ban+

could not collect the bills on due dates.

&) ee that the discount received on bill purchased is amortised over

the period of bill

3) All irregular accounts should be reported.

?) >here the bills are accompanied with: the documents and the

same are to be parted with the bills to be considered a clean bill.hese types of bills are shown as unsecured 8>hen bills are

accompanied with documents of title: they are called documentary

bills.

=) he Bills purchased and discounted being part of advances it

should be classified along with schedule of advances.

BILLS OR COLLECTION$

1. ee that documents accompanying bills should be received and

are duly entered in the register.2. he parties account should be credited only after proper collection

of bills or an advice to that effect is received from the branch.!. n case where bill is sent for collection by one branch to another

branch: at the time of consolidation: see that the receiving branch

reverse the entry regarding such inter branch bills.

,erify the Balance of the final statement of Bills discounted

with relevant ledgers and Balance Boo+s.

Count the Bills on the date of visit. ,erify the clearance of the

bills outstanding on !1st /arch but cleared in the current year

before the date of the audit by chec+ing the "egister.

ee whether Bills are cleared on due dates. f Bills are

dishonoured frequently by any party the reasons should be

investigated.

"evise carefully all overdue Bills and get e


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=.1& 5on7

Performing

Advances

CLASSIICATION O ASSETS

he assets are classified in the following broad groups-

1) tandard Assets

2) ub7tandard Assets

!) (oubtful Assets

&) Loss Assets

) Sta'dard Assets$tandard asset is one which does not disclose any problems and

does not carry more than normal ris+ attached to the business.

) Sub-Sta'dard Assets$

ub7tandard asset is one with has been classified as 5PA for a

period upto twelve months. n other words: such an asset has well

defined credit wea+nesses that 9eopardise the liquidation of a debt

and is characterised by the distinct possibility that the ban+ will

sustain some loss if deficiencies

6owever in respect of accounts where there are potential threats

of recovery on account of erosion in the value of security or non

available of security and e


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Documents

35 Audit Prgrams Bank Concurrent Audit