Page 279 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
and ensure these conform to RBI directions.
Permissible Transactions: Verify on sample basis permissible credits and debits in FCNR accounts as per RBI
directions.
Interest Calculation: Verify that interest on deposits has been paid on the basis of 360 days in a year.
Conversion Rate: In case of FCNR accounts, examine whether these have been converted into Indian Rupees
at rate notified in this behalf by head office.
Profit & Loss Impact: Examine whether any resultant increase or decrease has been taken to the profit and
loss account.
Others
There are some accounts like NRE [Non-Resident (External)Rupee account scheme] and NRO [Non-Resident
Ordinary Rupee account scheme]. NRE accounts may be opened by Non-resident Indians and persons of
Indian origin. NRO accounts may be opened by all non-residents.
These accounts may be maintained in form of savings, current, recurring or fixed deposit and are denominated
in Indian Rupees.

RBI Guideline: Verify credits and debits in NRE and NRO accounts on a sample basis as per RBI guidelines.
Reparability:
Confirm that NRE accounts are repatriable. Verify that NRO accounts are not repatriable, except for current
income under certain conditions.
General
Window-Dressing: Verify that deposits are not artificially inflated for balance sheet presentation. If such
practices are found, consider making a suitable qualification in the main audit report.
Interest Accrual: Ensure that interest accrued but not due on deposits is categorized under 'other liabilities
and provisions' and not under deposits.
KYC and AML Compliance: Confirm that the bank has a framework for 'Know Your Customer' and Anti-
Money Laundering measures in place.

(CNO-BA.520) Borrowings
Authorisation
• Money at Call & Short Notice
Examine whether borrowings of money at call and short notice are properly authorised. The rate
of interest paid/payable on, as well as duration of such borrowings should also be examined by the
auditor.
• Borrowings at Branch
Examine the relevant correspondence or other documents to ensure that the branch has been
authorised by the head office to borrow/retain other borrowings and that the terms on which
borrowings have been made are in accordance with the authorisation.
Documents
Obtain and verify confirmation certificates and other supporting documents such as, agreements,
correspondence, etc.
Classification
• Rediscount Vs Refinance
Examine whether a clear distinction has been made between ‘rediscount’ and ‘refinance’ for
disclosure of the amount under the above head since rediscount does not figure under this head.
• Secured Vs Unsecured
Examine whether the amount shown in the branch accounts is properly classified based on
security or otherwise.
External Confirmation

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