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BANK BRANCH AUDIT 2016 - Independent Bank Branch Auditor s Report (Illustrative format) for Modified Report Qualified or Adverse Opinion

BANK BRANCH AUDIT 2016 - Independent Bank Branch Auditor’s Report (Illustrative format) for Modified Report – Qualified or Adverse Opinion - Accounting - Auditing - By: - CA GOPALJI AGRAWAL - Dated:- 23-3-2016 Last Replied Date:- 24-3-2016 - Independent Bank Branch Auditor s Report (Illustrative format) for Modified Report - Qualified or Adverse Opinion To, The Statutory Central Auditors, Name of the bank Region _______________ 1. We have audited the accompanying Financial Statements of _XYZ_ Br .....

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dia guidelines, the provisions of the other Statute _________ (if any) and recognised accounting policies and practices, including the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility 3. Our responsibility is to expr .....

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the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Branch s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the .....

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on or Adverse Opinion Our test check reveals that there are several borrower accounts in the Annual Advance Statements carrying the following errors: Several borrower accounts have been classified as standard assets instead of non-performing assets (NPA) and unrealized interest for the current as well as prior periods have been accounted for resulting overstatement of the profit & advances at branch level and would result the under provisioning for advances as per Reserve Bank of India prude .....

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terest subvention on the irregular accounts cannot be ruled out. In case of non performing agriculture and government sponsored scheme advances, the security has been presumed without the physical verification and valuation of such tangible security, which would have been deteriorated or eroded due to efflux of time which might affect the provisions for advances materially. We also observed that the interest on KCC accounts which are irregular in payment, interest is being charged @ 7% resulting .....

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d would result the overstatement of provisioning on advances. Our test check has further revealed that: The branch had not been following properly the prudential norms on income recognition, asset classification and provisioning pertaining to advances in the past periods hence the advances amounting to Rs. _____crore approximately were recognized as NPA (sub-standard) during the financial year 2016-16 or in the month of ______ or on _________, in terms of HO Letter No……. to rectify .....

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viz. sub standard, doubtful and loss since the relevant date of each such account becoming NPA is more than 12 months. The unrealized income including interest on these accounts has been partially reversed. As required by Accounting Standard 5- The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived but it has not been followed. Qualified Opinion 7. In our opinion, .....

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ch containing the necessary particulars and is drawn up so as to exhibit a true and fair view of the branch as at the 31st March 2016 except the wrong classification of advances including errors in some fields of advance statements like irregular amount, date of NPA etc. (b) The aforesaid Profit and Loss account exhibits a true and fair view of the Operating Profit of the branch for the year ended the 31st March 2016; OR (Alternatively) Adverse Opinion In our opinion, because of the significance .....

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ss Account contains the data required to draw up the Balance Sheet and the Profit and Loss Account in Form A and B respectively of the Third Schedule of the Banking Regulation Act, 1949; 9. Subject to the limitations of the audit indicated above in para 3 to 5 above and paragraph 11 below, we report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of the audit and have found them to be satisfactory. (b) T .....

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nd Loss Account comply with the Accounting Standards (new 2016) Other matters {A 1, should be placed before report on other legal and regulatory requirements) 11. No adjustments/provisions have been made in the accounts of the Branch in respect of matters usually dealt with at Head Office, including in respect of: a. Various disclosures are required by Accounting Standards, RBI guidelines and other rules and regulations (MUST READ CLOSING CIRCULAR) b. Bonus, ex-gratia, and other similar expendit .....

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various heads comprising Inter branch/office Adjustments; g. Auditors fees ; h. Taxation (Current Tax and Deferred Tax); i. Provision for Advances; j. Reversal of interest of new Non performing accounts k. Provision for office rent 12. We have given _____Memorandum of Changes on the financial statements of the branch, which is summarized as below: MOC No. Increase Amount (Rs.) Decrease Amount (Rs.) In respect of Income In respect of expenditure In respect of Assets In respect of Liabilities In .....

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SING CIRCULAR AND OTHER CIRCULARS COPY OF COMPLETE CLOSING RETURNS REVIEW OF REPORTS WITH COMPLIANCE REPORTS Statutory report L/Y 20XX-20XX Concurrent Inspection/Revenue Internal RBI others BALANCE SHEET Scrutiny of Balance Sheet & Profit & Loss Account (Including analysis of subsidiary records other than deposits & advances) General Ledger / Profit & loss Accounts Ledger Ratio analysis [comparison with previous year] Interest earned to net advances Interest paid on deposits Anal .....

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Staff Loan-Title deed Fees and charges on NPA should be reversed FDRS matured against demand loan must be adjusted. STOCK/ INSURANCE REGISTER / PARTY INSPECTION REGISTER /DP - For LFAR reporting -large advances [Lower of 5% of total or ₹ 2 crore] CC-Yearly renewal Register-partywise details- Excess drawings Balance Confirmation (BC) Register -Limitation Register- NPA Provisioning in case of NPAs with regard to security valuation Implementation of procedure for verification & valuation .....

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R · Periodical physical verification by senior officer fortnightly · Excess cash reported to controlling authorities · Scrutiny of inoperative accounts · KYC-New customer account PHYSICAL VERIFICATION · Cash with certificate · Fixed assets register with few items · Tokens (missing tokens records) · Stationery items (test basis)/security register with working papers-certificate · Gold Coins BALANCING OF DEPOSITS SUBSIDIARY RECORDS DEP .....

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