ICAI Issued Guidance Note on audit of Banks

The Guid­ance Note pro­vides an insight into the bank­ing indus­try in India and how they car­ry out their day to day func­tions. It also dis­cuss­es in depth the var­i­ous impor­tant items on the finan­cial state­ments of a bank, its pecu­liar­i­ties, man­ner of dis­clo­sure in the finan­cial state­ments, the RBI pru­den­tial direc­tions there­on, audit pro­ce­dures, etc.  Sim­i­lar­ly, the Guid­ance Note has Chap­ters on audit pro­ce­dures for report­ing on long form audit reports for banks and bank branch­es, report­ing under Ghosh and Jilani Com­mit­tee require­ments, spe­cial pur­pose reports and cer­tifi­cates, etc. Impor­tant­ly, the audit pro­ce­dures are based on the prin­ci­ples enun­ci­at­ed in the Stan­dards on Auditing.

The Guid­ance Note, inter alia, has been updat­ed for the impact of RBI Mas­ter Cir­cu­lars issued in 2014, Basel III, ser­vice tax require­ments, etc.  Impor­tant­ly, the audi­tors of the bank­ing com­pa­nies, in addi­tion to the report­ing require­ments under the Bank­ing Reg­u­la­tion Act, 1949, would also need to report pur­suant to sec­tion 143 of the Com­pa­nies Act, 2013. The audi­tors would accord­ing­ly need to amend their audit engage­ment let­ters and the audi­tor’s report. Illus­tra­tive for­mats of an engage­ment let­ter and an audi­tor’s report for a bank­ing com­pa­ny, meet­ing the require­ments of the Bank­ing Reg­u­la­tion Act, 1949 as well as the Com­pa­nies Act, 2013, have also been giv­en in the Appen­dices giv­en in the CD.  Sim­i­lar­ly, an updat­ed bank branch audit pro­gramme for 2014–15 audits is also given.

The full text of the 2015 Guid­ance Note on Audit of Banks and the con­tents of the accom­pa­ny­ing CD (Appen­dices etc) are avail­able on ICAI’s web­site www.icai.org and can be down­loaded free of charge from URL http://www.icai.org/new_post.html?post_id=11394&c_id=219

The Guid­ance Note will also soon be avail­able in the print­ed book form at the ICAI’s sales coun­ters near you.