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Concurrent Bank Audit ?

Mahika (CA-FINALIST) (64 Points)

01 October 2009

HI FRIENDS !

I NEED UR HELP ON THIS !!!

CAN U PLZ GIVE ME SOME TIPS FOR PERFORMING CONCURRENT BANK AUDIT IN PERFECT WAY !!!

PLZ GIVE ME UR TIPS ON THIS ....

M WATING FOR A LOT OF REPLIES !!!!!!!

MAHIKA KAPOOR :-)

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22 Replies

MAHENDRA KUMAR BAGRECHA (FCA) (1402 Points)
Replied 01 October 2009

Hi Mahika,

You can check following:

1.KYC Norms compliance by bank

2.NPA

3.Physical cash verification

4.Physical Stationery verification and security measures applied by bank for stationery items

5.Cash retention limit of the branch and if cash is exceeding that limit, branch should report to HO/RO

6.During the month new CC/OD/SB/Current account opened.

7.Very important- documentation of these above opened accounts. for CC/OD, documents should be as per sanctioned letter (strictly)

8.Monthly Stock statement in case of CC/OD account

These are few broad areas which you must check, apart from these things, as you will do the audit, you will understand many things.

Thanks

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Mahika (CA-FINALIST) (64 Points)
Replied 20 October 2009

thanx a lot mr .mahendra ............

CA RAJESH BALSARA (Proprietor) (262 Points)
Replied 20 October 2009

Hi Mahika, Apart from wht mr.Mahendra told, Further, Find out which are major CC/OD Accounts of that Bank.(which u can find from closing balances).or u can ask the concerned person in bank handeling cc/od facilities..One of the condition is to submite last audited balance sheet..Tally the stock shown in audited balance sheet vis-a-vis average stock shown during monthly stock statment. 2) Newly opened savings/current accounts..documents taken thereof.. 3) Learn How interest is calculated on savings and fd int. 4) Find out How and who maintaines cheque returns Register/Record..Whether charges are collected for such cheque Return Transactions 5) cash shoulbe checked by senior most person once in a month 6) other facility like fire extinguisher, alarm system,hidden camera, securities, all these to be seen.If any major deficiency u can surely report..because proper security of cash is main purpose.

CA. Gurdeep Singh Chawla (C A) (7080 Points)
Replied 22 October 2009

In addition to the above check also revenue leakage like processing fees, documentation charges, Inspection charges, Interest rates ( interest field in computer enviornment) as per sanction letter etc. Plan your audit programe as per Bank's audit report formate.

1 Like

Dintakurthi Tirumala (CA FINAL) (15994 Points)
Replied 26 October 2009

Hi, Mahika please remember the main income generated to bank from revenue items like interest received , bank charges, inspection and processing charges etc.... and more risk involved in advances so you should concentrate on revenue leakage part and on advances area it more help full to bank and we can minimise the risk and loss to bank mr.Mahendra Kumar and Mr.Rajesh said above also part of concurrent audit but you must and should concentrate on revenue and advances area if like to say please mail to sairam_tirumala @ rediffmail.com u r auditing bank and branch and your audit experience and observations

OM SAI SRI SAI JAI JAI SAI

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Neelu (Partner) (29 Points)
Replied 09 February 2010

Hi Mahika, In addition to what all is said, check the Document expiry case, specially in case of irregular advances account, because if the documents specially LAD , letter of continuity is not there, then, it may pose a problem in case of filling suit for recovery.

Check whether lien is marked in favour of bank on the collateral & primary security, check the insurance in favour of bank, premium paid in time

shikha (student) (23 Points)
Replied 17 May 2010

these days it is all CBS banking,wat to do if report generated by them are showing wrong data???

CA-CWA RAVI (CA-CWA in industry) (5464 Points)
Replied 22 May 2010

shikha most of the banks's detail is still not filled correctly on finnacle

so wat u need to do is

for credit functions just depend on manual registers

and for non credit just beleive on cbs reports as they are almost right

1 Like

Vishal Dwivedi (CA Student) (23 Points)
Replied 02 July 2010

HI FRIENDS !

I NEED UR HELP ON THIS !

CAN ANYBODY PLEASE GIVE ME SOME TIPS FOR PERFORMING REVENUE AUDIT (REVENUE LEAKAGE AUDIT) OF A SCHEDULED BANK.

I WANT TO KNOW WHAT RECORDS ARE MAINTAINED BY A BANK WHICH I CAN CHECK FOR MY PURPOSE.

PLZ GIVE ME UR TIPS ON THIS ....

I AM WATING FOR REPLIES.

-: VISHAL DWIVEDI

Neelu (Partner) (29 Points)
Replied 03 July 2010

Hi Vishal,

Revenue leakage , as the term suggest is the leakage of revenue, which may be in the form of short booking of Income or charging excess expenditure.

Income of a bank is in the form of interest earned on advances, commission, brokerage, on guarantee, LC, DD, TT, PO.

Income leakage may be because of wrong rate of interest fed into the system. Wrong formula fed for calculation of commission on Guarantee/LC, which might be substantial figure.

Supervision charges, process fees not debited to the loan account., Franking charges on loan account not debited to the customer account instead debited to may be Misc. Exps.

Penal interest not charged for non submission of stock statement, for overdue loan.

All other expenditure especially, legal exps, paid as per the bank's norms.

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Vishal Dwivedi (CA Student) (23 Points)
Replied 03 July 2010

Hi Neelu,

Thanks for giving your valuable suggestions.

muthulakshmi (ca student ) (113 Points)
Replied 03 July 2010

Check on tds also..

shikha (student) (23 Points)
Replied 10 July 2010

u know the best thing.....the bank which i m into............do not hv proper manual register also to check....so dat means u cannot rely on anything...............n for the revenue leakage check the processing charges on new sanction as well as renewals of loans...............

divyesh (Partner) (107 Points)
Replied 31 July 2010

I am enjoying cash credit faclity of Rs. 1 lakh for my partnership firm with business turnover of Rs. 20 lakhs involved in retail trade. Recently my bank asked for audited financial statements of my firm stating that now as per RBI circular any customer whose trunover is more than Rs. 10lakh and is avialing any advances from bank needs to get accounts audited.

Where as per Income tax act My firm is not required for audit as turnover is juts Rs. 20 lakhs? Can anyone confirm the has RBI issued circular to thath effect?

Regards

Divyesh