BANK BRANCH AUDIT 2020-21

Section Index to the Background Material Pages

I NOTE ON BACKGROUND MATERIAL 1-17
II PRELIMINARY WORK
A Letter to Branch Management (Audit Engagement/ initial letter seeking 1 -3
information/management representations)
Annexure to Letter
I &IA Information/Requirements in connection with the audit 4-20
II Information on Advances 21
III Observations/Status Review on Major Advances accounts 22-32
III.1 Major Advances Accounts – Compliance of Terms and Conditions 33
of Sanction
III.2 Key Financial Indicators for the last two completed years and 34
projections
IV Statement of Overdue Deposits 35
V Entries originating prior to but responded after 31-3-2021 36
VI Branch Data for the 12 Odd dates for SLR 37
AA Letter to Branch Management for Compliance of the RBI Circulars 1-2
concerning COVID 19
B Text of letter suggested for being addressed to the Branch (year-end) 1-2
III AUDIT PLANNING / PROGRAMME / EXECUTION
C Branch Audit Programme and Guidance
C Branch Audit Programme 1-35
C1 Advances requiring special attention 36
CII Common Irregularities/Adverse Features in Advances 37-40
CII.1 Observation/Status Review of major advances accounts 41
CII.1.1 Summary of Adverse observations on advances accounts 42
(Illustrative)
CII.2 Summary of Adverse features in advance accounts 43
CII.3 Form of MOC relating to advances 44
CC Branch Management Representation to Auditors (Illustrative) 1-6
IV REPORTING
D Form of Independent Auditor’s Main Report to the members 1-2
As per Guidance of ICAI (2020 edition Section C)
D.1 - Nationalised Banks 3-9
D.1.1 - Banking Companies 10-16
Illustrative recommended Branch Auditors Report on the financial
Statements of
D.2 - Nationalised Banks 17-23
D.2.1 - Banking Companies 24-30
D.3 Illustrative recommended paras for modification in Internal Financial 31-32
Controls Over Financial Reporting
D.4 Qualifications/Observations(Illustrative) for incorporation in the Report 33-46
D.5 Para (Illustrative) in the report to indicate a disclaimer for procedures 47-49
not possible due to non visit to the branch
D.6.1.1 Form of MOC relating to Advances 50
D.6.1.2 MOC affecting Advances/Classification 51-52
D.6.1.3 Recommended format for MOC (other than Advances) 53
D.6.1.4 Format of List of advances Accounts for which interest 54
calculations have been checked
D.L LFAR Questionnaire and recommended action for Reporting 55-80

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BANK BRANCH AUDIT 2020-21

V REFERENCE MATERIAL
E& RBI Norms on Income Recognition, Asset Classification and 1-38
EI Provisioning (2020-21) – Summary
E.II Reckoner for Classification of Advances 39-41
E.III Provisions Required based on categorization of Advances Accounts 42-49
E.IV Other Clarifications on Advances 50-63
E.V Resolution Framework for COVID-19-related Stress 64-70
E.VI Computation of Drawing Power in facilities against stocks and 71-72
debtors
F Accounting Standards (ICAI) 1
F.I Indian Accounting Standards (IND ASs) – For information/knowledge 2
F.II Standards on Auditing (SAs), Review (SREs) and Other Standards 3-4
(SAEs/SRSs)
G.I Audit in EDP Environment, Internal Controls and Risk based Audit 1-8
approach
G.II Summary of Advances of the Bank (for information) 9-10
G.III Asset-Liability Management (ALM) 11-20
G.IV Broad Analytical Procedures 21-22
H List of Important Circulars of Reserve Bank of India (6-2-1992 to 23-3-2021) 1-12
I Broad Guidance on extended scope of work re: Frauds 1-28
J The Third Schedule 1-10
J.1 Notes and Instructions for Compilation 11-25
J.2 Disclosure Items for Banks & Detailed Balance Sheet disclosures 26-47
K Recommended form of the certificate-Ghosh and Jilani Committee 1
K.1 ICAI Recommended - Ghosh and Jilani Committee 2
L Important provisions of the Banking Regulation Act, 1949 1-8
L.1 Depositor Education and Awareness Fund Scheme 9-10
L.2 Gold Monetisation Scheme – Brief Note 11-16
L.3 Trade Credits for Imports in India – Brief Note 17-18
L.4 Interest subvention scheme – Short term crop loan 19-22
L.4.1 Interest subvention scheme – Fisheries and Animal Husbandry Farmers 23-24
L.4.2 Interest subvention scheme for MSMEs 25-28
L.5 Kissan Credit Cards 29-34
L.6 Mudra loan of Pradhan Mantri Mudra Yojana 35-36
L.7 Short Note on CERSAI 37-38
L.8 Credit Guarantee Fund Scheme for MSMEs 39-41
L.9 Trade Receivables Discounting System 42-43
L.10 Note on advances documentation and evidence 44-46
L.11 Scheme for grant of Ex-gratia payment to specified borrowers 47-50
L.12 Interest Equalisation Scheme on Pre and Post Shipment Rupee Export 51
Credit
M Manner of computation of interest accrued on FCNR(B) deposits 1-2
N Abbreviations used in the Banking Industry (RBI) 1-11
O Issuance of certificates to the bank /regulators – Unique Document 1
Identification Number
P Peer Review Confirmation 1

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