Page 285 - CA Final Audit Titanium Full Book. (With Cover Pages)
P. 285
CA Ravi Taori
(CNO-BA.640) Reports and certificates
(CNO-BA.660) Concurrent Audit
Concurrent Audit Basics: Concurrent audit verifies transactions as they occur, distinct from a pre-audit. It
aims to confirm transaction authenticity quickly. This approach resembles the internal audit under the
Companies Act, emphasizing regular verification by an independent party to catch deviations swiftly.
Implementation in Banking Sector: Concurrent audit has become popular in both public and private banks.
Some banks use their internal inspection teams, while others outsource to chartered accountant firms.
Guidelines from RBI: The RBI has provided specific guidelines for the execution of concurrent audits.
(CNO-BA.680) Scope of Concurrent Audit
Who will determine scope: The detailed scope of the concurrent audit should be clearly and uniformly
determined for the Bank as a whole by the Bank’s Inspection and Audit Department in consultation with the
Bank’s Audit Committee of the Board of Directors (ACB).
Cover high-risk transactions with large financial implications: In determining the scope, importance
should be given to checking high-risk transactions having large financial implications as opposed to
transactions involving lesser amounts. The detailed scope of the concurrent audit may be determined and
approved by the ACB.
Guidelines by RBI: Further, the guidelines issued by the RBI cover all the key areas of activities of the branch
which is under concurrent audit. Most banks have prepared an Audit Manual for this purpose. Broadly stated,
the following areas are covered by these guidelines:
Shortcut to remember – Scope Covers A to I except don’t cover BEG
A-Advances | B-Blank | C-Cash | D-Deposits | E- Blank | F-Foreign Exchange Transactions | G-Blank | H-House
Keeping | I-Investments
(CNO-BA.700) Types of Activities to be Covered
Foreign Exchange
3
Shortcut to Remember: - F AN of Foreign Exchange Trading
• FCNR Facility Rules: Check FCNR and other non-resident accounts whether the debits and credits are
permissible under rules.
• Forward Contracts Extension or Cancellation: Examine extension and cancellation of forward contracts
www.auditguru.in 14.29