Bankers to launch complaint against Auditors in case of Willful Default if falsification of accounts is noticed

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Bankers to launch complaint against Auditors in case of Willful Default if falsification of accounts is noticed

  1. Recently RBI has come up with circular RBI/2022-23/15 DOR.STR.REC.4/21.04.048/ 2022-23 dated April 1, 2022. The Circular mention auditor’s role in case of willful defaulters as mentioned under RBI circular DBR. No. CID. BC.57/20.16.003/2014-15 dated 01.07.2014.
  1. In terms of the Master Circular mentioned above, in case any falsification of accounts on the part of the borrowers is observed by the banks / FIs, and if it is observed that the auditors were negligent or deficient in conducting the audit, banks should lodge a formal complaint against the auditors of the borrowers with the Institute of Chartered Accountants of India (ICAI) to enable the ICAI to examine and fix accountability of the auditors.
  1. Pending disciplinary action by ICAI, the complaints may also be forwarded to the RBI (Department of Banking Supervision, Central Office) and IBA for records. IBA would circulate the names of the CA firms against whom many complaints have been received amongst all banks who should consider this aspect before assigning any work to them.
  1. RBI would also share such information with other financial sector regulators/Ministry of Corporate Affairs (MCA)/Comptroller and Auditor General (CAG).

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