ca manish baxi concurrent audit procedures icai certificate course on concurrent audit of banks at :...
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CA Manish Baxi
Concurrent Audit Procedures
ICAI Certificate Course on Concurrent Audit of Banks At : MORADABAD BRANCH
05.07.2014
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Audit Procedure……Means…..
Established Way of doing Audit Series of Action in a certain wayApproach of the AuditVerification according to Check List
CA Manish Baxi
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Introduction – Session I
Concurrent Audit Course –it’s Objectives –Limitations
About BankingConcurrent Audit EvolutionScope of Concurrent AuditObjective of Concurrent Audit
CA Manish Baxi
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CA Manish Baxi
About Objective of Course
To assist the Concurrent Auditors and to provide insight of the Audit
Aspires to introduce uniformity in conduct and reporting
TO provide practical and field work approach
To exhibit the RBI & GOI our sincerity to the assignment
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CA Manish Baxi
Limitations
Not a single set of guidelines as Banks vary in size , nature of business
No assurance that only Certified Concurrent Auditor of ICAI would get the assignments
Your direct involvement – Not a just class room training. –TO BE A STUDENT
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CA Manish Baxi
How Many Squares Do U Find ???
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CA Manish Baxi
Banking Products & Services
Acceptance of Deposits & Granting Advances
Remittances – TT/MT/RTGSCollectionsClearingTreasury FunctionCash Management product
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CA Manish Baxi
Banking Products & Services
Letter of Credit and GuaranteesMerchant BankingCredit – Debit cardsDividend / Interest/ Refund
WarrantsSafe-keeping & LockersHandling Government Business
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CA Manish Baxi
Banking Products & Services
DP servicesATMsAuto Sweep facility in S/B
AccountsAdvertisement on ATMsSecuritization of future Lease
Rentals
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CA Manish Baxi
Para-Banking Activities
Equipment Leasing, Hire Purchase & Factoring
Mutual Fund businessMoney Market Mutual FundsInsurance AgentsTax Matters================================Transaction in Foreign
Exchange
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CA Manish Baxi
Banking Software – An Overview
1980 – Computerization of Branches in limited manner
Multi Vendor approach – Hardware and to develop
Software.=================
Initially software on fox=pro or C ----dos-based.
Then Unix based.
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CA Manish Baxi
Banking Software – An Overview
1990 --Total Branch Automation packages.
Central Server – database – multiple terminals…………AND
Multiple PCs as nodes linked on LAN.
Platform –Simple UNIX-C to RDBMS like ORACLE.
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CA Manish Baxi
Banking Software- An Overview
Middle & Late 90s – deregulation , globalization, rapid revolution in communication technology.
Internet , Mobile , cell phone Revolutionary changes
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CA Manish Baxi
Evolution of Concurrent Audits in Banks
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CA Manish Baxi
Introduction
Formally introduce by RBI – October 1993- Revised in August 1996 – August 1997
Ghosh CommitteeFinancial sector reforms Banks diversified operationsInvestment banking- Gold banking-
Mortgage financing- e-banking - Securitization
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CA Manish Baxi
Concurrent Audit – Concept Expectation ----JOB to Perform
RBI : An examination which is
contemporaneous with the occurrence of transaction.
It attempts to shorten the interval between a transaction and its examination by a Independent person.
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CA Manish Baxi
Concurrent Audit In Banks
Primary Objective :
To serve as an administrative support to branches , it is a Management process.
To ensure sound internal accounting function---Effective Control ---Setting the tone for vigilance
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CA Manish Baxi
Concurrent Audit in Banks :Objectives
To reduce interval between a transaction and its examination
To point out irregularities at early stage to prevent fraud.
Compliance of internal control as well as RBI/GOI guidelines.
Identify areas requiring corrective action .
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CA Manish Baxi
Concurrent Audit in banksObjectives
To ensure that delegation of Authority is exercised judiciously .
To report to appropriate levels of management for appropriate action for remedial measures.
To verify timely and regular submission of the statutory returns .
To carry out physical verification of cash , Stock and other assets.
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CA Manish Baxi
Concurrent Audit in Banks
Scope:Emphasis in favour of substantive
checking in key areas rather than Test checking.
Transaction vis-à-vis Systems and procedure.
Transaction vis-à-vis Authority Head office directives and RBI policy
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CA Manish Baxi
Concurrent Audit in Banks
Scope :To help Branch in charge to ensure
on an ongoing basis that the different divisions functions with in laid down parameters .
RBI –working group – Shri Jilani Some banks have issued guidelines
on the scope , coverage ,reporting …..
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CA Manish Baxi
Concurrent Audit in Banks :Practical TIPS
Go through the circular file of Bank for updating Check List and action points.
To refer : Manual – bank’s instruction booklet – Exchange control manual- Latest inspection file- Previous concurrent audit report.
Personal discussion with in-charge of operational departments
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CA Manish Baxi
Practical TIPS
Introduce concurrent audit Log register
Rectification and compliance of previous reports observations
Advances are backed by documentation and security
Not only regulatory compliance but Value addition approach
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CA Manish Baxi
Practical TIPS
Flash reports in case of robbery ,
theft , suspected frauds , abnormal transaction.
Persisting irregularities needs to be reported to higher ups.
Report must be in a FORMAT and Timely.
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CA Manish Baxi
Concurrent Audit = C.A.
C.A. +
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CA Manish Baxi
C.A. + A B C D E F …….1 2 3 4 5 6…..
Knowledge………………96%Hard work………………..98%
ATTITUDE ..…..100 %