BANK AUDIT IN CURRENT SCENARIO
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Approx 30 years back; I remember my articleship days at Calcutta
when I visited a Bank for statutory audit with our Audit Team.
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After conducting the audit; the Team Head happily reported to the Boss :
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“We have checked 80% of advances (Total advances Rs. 2 crores) and all is ok.”
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The boss raised his eye brows and asked :
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What about rest of Rs. 40 Lacs of advances?
Are you sure these are not bad debts?
Please don't comment until I invite.
For banks; now Rs.20 crores of advances doesn't matter.
Who cares for the PUBLIC DEPOSITS? . .
When no audit is required for Rs.20 crores advances (REAL MONEY); then what is the LOGIC to conduct the TAX AUDIT of just Rs.1 Cr. above of TURNOVER !
RBI take the plea that lot of expenditure is incurred on Statutory Audits of the bank.
Just to avoid the expenses, how far the logic of RBI is correct?
Who will take care of financial frauds? Why we incur huge expenditure on our defence forces, what is the use...We can incur expenditure when the enemy attacks.....
Wah re sarkari soch.......
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CA Deep Jain, Faridabad
I think even LOSS MAKING COMPANIES should also be OUT OF PURVIEW of AUDITS
because it creates FINANCIAL BURDEN TO THEM.
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If the CENTRAL AUDITORS certify the BOOKS OF BANKS without conducting BRANCH AUDITS;
then whatever RESORTS they take;
further SUCH MEASURES are likely to be LODGED by the REGULATORY AUTHORITIES.
The fear of presence of Auditors in the mind of client is ENOUGH to prevent the FRAUDS.
Whenever an outsider comes for checking; it is always taken SERIOUSLY by the employees and the management.
Unfortunately;
the AUDITORS' INDEPENDENCE has lost due to actual powers of his appointment in the hands of management despite using HUGE PUBLIC FUNDS.
| Originally posted by : *...CA...* | ||
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I think the decision taken by RBI.... . .keeping in mind the consolidated view of the value of rupees, techonology advancement & poor quality of audit by CA's ! I welcome the move and i also eagerly waiting for complete abolishment of concurrent audit system in near future ! |
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Your experience might be very bad either as an articled clerk or due to too low fee in the professional capacity.
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The required thing is to give REMEDY to the problem and not that AUDITORS should be removed.
If a house is full of dust;; it does not mean we should never enter therein.
What course of action should be; everyone knows.
And why only concurrent audit be abolished.....?
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All the companies must be out of purview of the audit whose turnover (not loans) is lesser than Rs.20 crores.
( Which one is important - Actual Loan of Rs.20 Crores or Turnover of Rs.20 Crores)?
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(according to your view : Mr Dot..Dot..CA .)
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| Originally posted by : *...CA...* | ||
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Dear S.K.Rakhecha sir..... I asked for complete abolishment of concurrent audit system because . CA's could not give any kind of fruitful outcome to banks . . CA's shows keen interest in getting the assignment and once they get it they will show their true color. . Because of low fees for doign concurrent audit, Most CA's dont do extensive concurrent audit as expected from them, instead they just fill up the concurrent audit format by hook or crook and submit to the branch manager. . Such audit report has got no value instead it just adds burden to bank authorities including monetarily. |
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Agree wid above comment...
Important is public money, investors money whether its a single rupee or millions.......keeping this point in mind 100% branch audit should be there..........
solution
for branches whose advances are below 20 crore, appointment should be done by banks on own by way of tender system or whatever system which financially beneficial to bank ..... and for branches whose advances more than 20 crore present system should be followed.
CAclubindia
