29 March 2016
Audit Procedure (In Brief) in case of Bank Branch Statutory Audit :
1) Preparation of Audit Plan 2) Work Allocation between team members 3) Reading of Closing Circular, Bank policy, Delegation of Authority 4) Have a look on LFAR points, List of Certificates which requires to sign, Various system generated reports – Exception report, Exceeding report, SMA II report, etc. 5) Reading and noting the points from Concurrent Audit Report, Inspection Report, RBIA report, System Audit Report, Last year’s financial statements. 6) Verification of GLA with FormA and FormB. 7) Selection of Advances according to Portfolio of Branch (Needs to ask for facility-wise jotting). It should be sample basis with coverage of all the products – While checking the advances go through the detail current file of communication, Latest Annual financials, Stock Audit Report, Credit Audit Report, Credit rating, CIBIL report, Valuation report of Collateral, Search Report, Mortgage papers, etc. Filling of Checklist is preferable according to facility. 8) Verification of KYC norms for the accounts opened during the audit period. 9) Stationery Verification – DD, Cheque books, FD, Lockers, Stamps ,etc. 10) Cash and ATM cash (if any) verification. 11) FormA - FormB head wise analysis with last year comparison and if variation is more than 5%-10% then reason for the same. 12) FormB – On Test basis vouchers-supporting of the expenses needs to verify. 13) Interest Verification – CC, OD, TL, RD, etc. 14) Commission Verification of DD, BG, LC, etc. 15) If AD Branch then foreign exchange related transactions needs to verify with proper supporting – Preferably checklist of the same needs to fill. 16) Based on the above audit needs to fill up the LFAR and verify the Certificates. 17) Verify the Provisioning on advances as per the RBI guidelines or not ? 18) Verify the classification of advances – Priority, Others, Staff, etc 19) Verify the Basel II – III report, Verify the Risk Weightage and cross tally the same with total advances. 20) Verify the transactions on test basis through black box testing. 21) Form A Verification – Long outstanding entries, age-wise break ups, subsequent clearance of parking entries (if any), grouping of advances, etc. 22) Documentation for Peer Review point of view and Create documentary evidances during the course of Audit.
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