A NOTE ON ASM- AGENCY FOR SPECIALISED MONITORING

What is ASM in audit?

ASM means Agency for Specialised Monitoring. Banks are supposed to
monitor their borrower's financial operations. Now Chartered
Accountants are appointed as Agents of the Bank for specialised
monitoring of the financial operations of the borrower, largely to track
any misuse /diversion of funds.

What is ASM report bank?

A critical strategy in reducing NPAs, ASM audits involve extensive
analysis of a company's transactions, operations, and financial health.
Auditors spend weeks going through ledgers, bank statements, project
reports and other information to prepare their quarterly report.

APPLICABILITY OF ASM AUDIT-

ASM will be applicable for all debtors where exposure is above INR 250
Crore. The Scope of work shall include: Concurrent Review and
Monitoring Procedures (for Working Capital)

The process for selection involves the following steps:

1. Invitation for application by IBA
2. Submission of application with supporting documents by ASMs
3. Successful Payment of stipulated application fees by the ASMs
4. Scrutiny of the application and eligibility by the Working Group
constituted by IBA
5. Raising of queries by the Working Group members and response by
applicants.
6. Finalisation of eligible agencies for empanelment
7. Payment of stipulated Empanelment fees by the ASMs
8. Approval of the panel by the Manging Committee of IBA
9. Publication of the approved list of empanelled ASMs
MANISH MAHAVIR & CO
CHARTERED ACCOUNTANTS
9830248684
 A NOTE ON ASM- AGENCY FOR SPECIALISED MONITORING

10. Sharing of the approved panel with member banks

SCOPE OF ASM AUDIT-

The broad scope of ASM Audit work involves the following activities:
 Stock & Receivable Audit
 Cash flow Monitoring
 LC/BG Audit
 Sales/Purchase Monitoring
 End Use of Funds/Siphoning of Funds
 Verification of group company transactions at arms length
 Validation of Drawing Power as per Banks’ sanctioned terms
 LIE Work for Term Loans/Projects
 Review of project progress vis-a-vis scheduled milestones, Capacity
Utilisation, asset book size, quality and diversification.
 Verification of re-valuation of assets if any
 Verification of routing of project revenue and expenses through
designated bank accounts
 Verification of project expenses, payments to creditors and advances
to suppliers
 Review of unbilled revenue and WIP and justifiable reasons for the
same
 Litigations/Contingent Liabilities including letters of comfort
 Pre-disbursement verification of some specific high value transactions
as the Banks may deem necessary
 External Ratings, statutory and regulatory compliances, insurance
cover.
 Assessment of Quarterly Key Financial Indicators/Movement in stock
exchanges
 Movement in promoter holding in the company from time to time
and percentage holding pledged to financial institutions and banks to
raise capital

MANISH MAHAVIR & CO

CHARTERED ACCOUNTANTS
9830248684
 A NOTE ON ASM- AGENCY FOR SPECIALISED MONITORING

 Any other Key Areas Review (KAR) which the Banks find necessary
to be monitored

MANISH MAHAVIR & CO

CHARTERED ACCOUNTANTS
9830248684