The Institute of Chartered Accountants of India (ICAI) has raised apprehensions about the accuracy of the audited financial statements of Allahabad Bank, Vijaya Bank and the Central Bank of India, saying the statutory auditors were under pressure from these banks to complete the audits within unreasonable deadlines. The accounting rule-maker, which is facing flak after the financial fraud at Satyam, has told RBI that the public sector banks put pressure on the statutory auditors to complete their work within 3-4 days and that such “hurried” audits have left a question-mark on the credibility of the banks’ financial statements.
“I have advised all chartered accountancy firms (doing bank statutory audits) against completing their assignments in undue haste under pressure from banks and signing documents prepared by the branches of the banks without checking them thoroughly,” said ICAI president Uttam Prakash Agarwal. Mr Agarwal said a bank audit requires due diligence of complex transactions and needs 15-20 days to complete.
The statutory auditors of these banks admitted to ET that they were pressured to complete the audits within 3-4 working days through mails and telephone calls. Central Bank of India wanted the audit to be completed by April 8 while Vijaya Bank and Allahabad Bank set deadlines of April 9 and April 10.
There were four bank holidays in the first 10 days of April — bank closing on April 1, Ram Navami on April 3, Sunday (April 5) and Mahavir Jayanti on April 7.
Central Bank of India said in a mailed reply that most of its branches completed their internal closing on March 31 and were ready for audit from April 1.
“We are nobody to exercise any pressure on the auditors, and auditors are at their liberty to do the audit as per their system and norms, which they follow and whatever information they ask is provided to them.” E-mails and phonecalls to Vijaya Bank and Allahabad Bank elicited no response.
ICAI took up the issue after complaints from the statutory auditors of the banks. “Many of the details cannot be independently verified in 2-3 days. There is a possibility that the audited statements might not be reflecting a true and fair picture of their financial health,” an auditor, who was on assignment with one of the banks said.