The Institute of Chartered Accountants of India (ICAI) has issued the Guidance Note on Audit of Banks 2022 Edition.
The guidance note consists of Section A pertaining to Statutory Central Audit including Personal Banking Department, Retail Banking and Marketing Department, Wealth Management and Third Party Products, International Banking Division, Treasury Operations, Audit of Information Technology and Digital Banking Division, Human Resources Department, Large Corporate and Loan Syndication, Micro, Small and Medium Enterprises Department, Rural and Agricultural Business Department, Law Department, Credit Recovery Department, Risk Management Department, Central Audit and Inspection Department, Credit Monitoring and Restructuring Department, Consolidation and Balance Sheet Preparation, Government Business Department, Consolidation of LFARs for the Bank, and Certification.
The guidance note consists of Section B – Bank Branch Audit which contains Practical Guide for Statutory Branch Auditors performing Bank Branch Audit for the First Time, Bank Branch Audit Planning, Audit Documentation in Bank Branch Audit, Balances with Reserve Bank of India, State Bank of India and Other Banks (For Branches with Treasury Operations), Clearing House Operations by Service Branches, etc.
“In the present scenario, besides actual conduct of the audit, proper planning becomes most important in bank branch audit engagements. Planning means detailing and requires advanced thinking along with knowledge/experience of bank branch business. It is important to have knowledge about the composition of business of a particular branch that is under audit. Because of a variety of products and diversified bank business, auditors cannot apply the same yardstick for all branches under audit. The engagement partner and other key members of the engagement team should be involved in planning the audit, including planning and participating in the discussion among engagement team members. Today, the whole process of banking is automated and computerized, and the way audit is conducted has also undergone a sea change. Nowadays most of the important functions and processes are more or less centralized and there is limited verification to be done at the branches. Audit at branches includes physical checking of records, documents relating to operations (advances and liabilities), verification of branch-related expenses, the existence of assets and other similar areas,” the note read.
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