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Remote Bank Audit – Ways and Means now
It’s a tough time for the auditor as well as bank. Almost a month is over, still the bank audit has not been commenced or not completed. The biggest hurdle is there when the branch and auditor are not located in the same city. The roads, trains and airlines are not working and the audit commencement is the biggest task.
To more it more complicated further, neither
has taken a stand to defer the audit till the situation is normalized.
Rather, the bank like SBI, and various others have issued a mail to the auditor to complete the audit within a period of 3 to 4 days. There are cases where a warning is given to auditor to complete the assignment within allotted time failing which they would be removed from the assignment.
More surprisingly, the partner in Nation Building will have a tough time to keep CA as “Alphabets of Trust”.
Even if the branch and auditor are in the same location, completing the audit in qualitatively way within a period of 3 or 5 days is not possible.
This is the time to recall that the RBI has already announced in the last year that it will also review the quality of audit already done by the auditor.
Auditors have an onerous duty to perform while carrying out the bank audit. This time will indeed be a tough time for the auditor now.
Ignoring the role of all the organization mentioned above & also ignoring enormous problem in the present scenario, let us find out the ways and means of completing the audit remotely.
Let us discuss what an auditor should do to complete the audit in such a situation when the movement is also prohibited.
Readers can further add and comments their views at the end to make the present exercise more futile and helpful.
- Make a new group of whatsapp or telegram consisting of branch officials and the teams members of CA firm. It will ensure better and timely coordination.
- The branches are under a CBS mode. So, if required, the auditor may ask the bank to ensure the access from other branches of the same bank in a locality nearer to the auditor location.BY this, the auditors are able to access all the required information in the system of the auditee branch.
- Ask branch officials to mail the copy of Financial statements for the FY 2019-20 & 2018-19.
Auditors may make separate file for all the branches they are auditing. They can take the print out of two years and can carry out comparison and ratio analysis so as to decide the level, area and quantum of checking.
- Take the complete list of advances outstanding as on 31.03.2020 along with overdue report, sanction date, outstanding balance, value of primary and collateral security, credit summation, debit summation, etc.
- Take the list of the NPA A/c as on 31.03.2020, 30.09.2019.
- Take the list of the Potential NPA A/c as on 31.03.2020, 30.09.2019.
- Take the list of new loans sanctioned during the year along with the copy of the sanction letter.On this basis, auditor can decide the copy of the bank statements required for verification of the accounts. To be on a better side, bank statements of all the loans sanctioned during the year can be called for.
- Ask the branch to scan and mail the copy of the
a) Last statutory audit report
b) Inspection and internal audit conducted during the year by branch or external auditor
c) Compliance report of previous audit
d) Revenue audit report, if any for the year.
e) Stock audit report of all the advances above Rs. 1 Cr.
d) Documents of all loans above Rs. 2 Cr as separate account report is required to be given in LFAR (Annexure F)
- The information with regard to the fraud cases can be further called by the auditor.
- The suitable clarification and comments may be placed in the audit report whenever needed as to the extent of verifications and prevailing constraints.
- The branch may be asked to mail all the statements which are needed to be certified by the auditor. For each and every statement, auditor can seek the details by way of mail or whatsapp from the branch.
- The whatsapp video call could be one of the most powerful tool for instant viewing of the documents.
- It will be advisable to appoint an assistant in the location of the branch. It can be done by taking the help of some CA in the nearby location of the branch. (Like for Nagpur, one can contact me on 85510-70846). Cash verification and few other things could be carried out through whatsapp video call and with the help of local assistants.
- The auditor can ask for the details of all the new accounts opened furing the year and KYC can be checked randomly through whatsapp video call whereby the branch would show the KYC documents on the mobile screen.
- MOC effect of the previous auditor should be verified by asking branch to mail it along with voucher.
- Invariably, ledger account statement of suspense debits and credits should be called by the branch auditor
- For tax audit report, separate team in the office should be assigned. TDS returns and fixed assets additions, deletions details, etc can be asked to mail.
- For LFAR, the date is already extended by RBI to 15.06.2020. If required, the auditor can defer it till the lockdown is opened so that it can be done by thorough verifications of all the advances. However, if the bank insists, the same can be done by the mode mentioned above.
This are just an illustrative version to convey that the audit function can actually be performed in e-mode. If Income Tax Officer are able to complete the assessment function electronically, why cannot we. It may be noted that TCS has taken a decisions that 75% of their team would now be working on the concept of “work from home”.
This is the time we the CA also need to be ready with this concept. Let us start it now. Let us turn every challenge in to an opportunity. Let us start bank audit remotely.
Kindly comment your views and opinion on this article to make it more useful for all the CA.
If any CA professionals are requiring any help in Nagpur, all are free to contact on 79722-66978.
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