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MEMORANDUM OF CHANGES, more often referred to as MOC is an important document enclosed with the Bank Audit Report whenever the Auditor observes significant issues effecting the Financial Statements of the Bank.

Usually, in case of other entities, first the accounts are audited and then the financial statements are drawn up adhering to all the regulatory principles as formulated by the laws of the land. Whereas in case of Banks, audit report is sent after the internal authorities have drawn up the final accounts which are already sent for compilation at Zonal levels. Hence, the term Memorandum of Changes, which incorporates in itself all the material changes effecting such final accounts.

MOC can be of following natures

1. Relating to suggested changes in Balance Sheet
2. Relating to suggested changes in Profit and Loss Account
3. Relating to suggested changes in advances portfolio of the bank
4. Relating to outstanding balances of the advances
5. Yearly return of provisions
6. Details of accounts for various changes
Reconciliation balances in interest not collected account
7. Summary of advance return
8. MOC for fixed assets.

MOC - Memorandum of Changes

Even in case there are no such issues observed by the Auditor, NIL MOC is required to be enclosed with the report. All the facts and figures given in the MOC are also given a reference in the Main Audit Report.


The following points have to be noted about MOC:

1. There should be clear justification for every change suggested by auditor i.e. the nature of change as well as the quantification of suggested change and it impact otherwise.

2. The format of MOC in most banks will have both sides like a trial balance. It should be ensured that total of changes suggested in balance sheet and profit and loss account is tallied on both accounts.

3. The total of reclassification of the advances suggested in secured , unsecured ,guaranteed advance and sector wise advance should be correctly brought out in the MOC and total of both sides should tally.

4. In case of change suggested as per prudential norms on income recognition, the impact, if any on the provisioning of the assets is also to be looked into.

5. It is to be ensured that a NIL MOC is invariably forwarded, even if there are no change to report.

6. Branch manager are required to report on each item reported in MOC.


The format of MOC is provided along with other supporting material sent by Banks to the respective auditors. Usually, MOC is considered in reference to Bank Statutory Audit though MOC can also be given while conducting Concurrent Audits.

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Category Audit, Other Articles by - Rahul ojha