Transcript - The Moradabad Branch Of ICAI

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 way
 Approach of the Audit
 Verification according to Check List

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Introduction – Session I
Concurrent Audit Course –it’s Objectives
–Limitations
 About Banking
 Concurrent Audit Evolution
 Scope of Concurrent Audit
 Objective of Concurrent Audit

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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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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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How Many Squares Do U Find ???
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Banking Products & Services
 Acceptance
of Deposits &
Granting Advances
 Remittances – TT/MT/RTGS
 Collections
 Clearing
 Treasury Function
 Cash Management product
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Banking Products & Services
 Letter
of Credit and Guarantees
 Merchant Banking
 Credit – Debit cards
 Dividend / Interest/ Refund
Warrants
 Safe-keeping & Lockers
 Handling Government Business
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Banking Products & Services
 DP
services
 ATMs
 Auto Sweep facility in S/B
Accounts
 Advertisement on ATMs
 Securitization of future Lease
Rentals
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Para-Banking Activities
Equipment Leasing, Hire Purchase &
Factoring
 Mutual Fund business
 Money Market Mutual Funds
 Insurance Agents
 Tax Matters
================================
 Transaction in Foreign

Exchange
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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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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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Banking Software- An Overview
& Late 90s – deregulation ,
globalization, rapid revolution in
communication technology.
 Internet , Mobile , cell phone
 Revolutionary changes
 Middle
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Evolution of Concurrent
Audits in Banks
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Introduction
Formally introduce by RBI – October
1993- Revised in August 1996 –
August 1997
 Ghosh Committee
 Financial sector reforms
 Banks diversified operations
 Investment banking- Gold bankingMortgage financing e-banking - Securitization

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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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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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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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Concurrent Audit in banks
Objectives
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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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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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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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 manualLatest inspection file- Previous
concurrent audit report.
 Personal discussion with in-charge of
operational departments
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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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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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Concurrent Audit = C.A.
C.A. +
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C.A. +
A B C D E F …….
 1 2 3 4 5 6…..

 Knowledge………………96%
 Hard
work………………..98%
ATTITUDE
..…..100 %
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