Practical Workbook for Bank Branch Auditors

This practical workbook, i.e. work programme cum audit notebook, is a one-stop reference for bank branch auditors providing a systematic audit approach and procedures. Overall, the aim of the workbook has been to provide an efficient and effective approach for accomplishing branch auditing, simultaneously documenting the audit work.

This workbook contains a five-staged approach:

• Acceptance of Audit
• Planning the Audit
• Conducting the Preliminary Audit
• Conducting the Final Audit
• Reporting the Audit

In each stage, the audit approach and procedures have been suggested in accordance with the RBI Norms and ICAI Standards on Auditing.

This book is helpful for branch auditors in accomplishing their branch audit more purposefully & bringing more comfort to the Statutory Central Auditors, Boards and Management.

The Present Publication is the 7th Edition & amended up to 24th February 2023. This book is authored by CA Ishwar Chandra, with the following noteworthy features:

• RBI's Extant Notifications/Circulars & Audit Procedures – Each chapter has been divided into two paragraphs. In the first paragraph, RBI's extant notifications/circulars have been discussed to help acquaint readers with relevant legal/regulatory guidelines. While in the next section, audit procedures have been suggested.
• References of RBI Notifications & ICAI Standards on Auditing – References have been given below the audit procedures.
• Audit Hints for Technology Environment of Banks – Guidance for Finacle, B@NCS and Flexcube has been given.
• LFAR Procedures – Contains 'what' and 'how' to evaluate and 'how' to report. For reporting help, audit comments have been illustrated.
• CBS Environment – An entire chapter has been devoted to useful system-generated reports for branch auditing in CBS environments, along with relevant commands/shortcuts and menus/navigations.
• Examples for Independent Bank Branch Auditors' Report – Examples for forming different forms of audit opinions and memorandum of changes (MOCs) have been suggested.
• SBA Formats – To collect and evaluate information in each stage, audit templates/SBA Formats have been suggested.

The structure of the book is as follows:

• In the initial chapters, pre-acceptance, post-acceptance and planning procedures are given.
• Subsequent chapters are devoted to bank branch auditing, which are as follows:
  • Audit of New Advances, including Audit of Credit Monitoring
  • Audit of Special Mention Accounts (SMAs)
  • Audit of IRACP and Resolution of Stressed Assets
  • Audit of Financial Statements
  • LFAR Procedures
  • Audit Procedures of Capital Adequacy Norms
  • Audit Procedures for Special-purpose Certifications
• The book includes two appendices, Appendix – A and Appendix – B:
  • In Appendix – A (24 Nos.), audit templates (SBA Formats) have been provided to help 'seek' and 'obtain' information and to evaluate the information obtained.
  • In Appendix – B, various notifications (e.g. RBI Circulars and ICAI Standards) are appended for quick reference of branch auditors.

The contents of the book are as follows:

• Introduction to Audit of Financial Statements
• Pre-Acceptance Procedures
• Post-Acceptance Procedures
• Planning Considerations
• CBS Environment | Useful System-Generated Reports
• Offsite Planning
• Onsite Planning
• Performing Preliminary (Routine) Audit Procedures
• Audit of New Advances
• Audit of Credit Monitoring
• Audit of Special Mention Accounts (SMA)
• Audit of Income Recognition and Asset Classification
• Audit of Provisioning
• Audit of Resolution of Stressed Assets
• Performing General Ledgers (GL) and Profit & Loss (PL) Audit Procedures
• Long Form Audit Reporting (LFAR) Procedures
• Audit of Capital Adequacy
• Special-Purpose Certification Procedures
• Issuing Independent Branch Auditors' Report