Bank Statutory Audit 2017-18 : Useful Resources

Dear All,

Creating a Common Pool of Materials/ Presentations/ Checklists / Circulars useful for Statutory Bank Audit : 

Now next few weeks are crucial for practicing Chartered Accountants who have been allotted the statutory audit of Bank. The time is short and enormous responsibility is cast upon as auditor.  In this scenario, planning and best utilisation of resources is key to perform the audit in this timelines.

To refresh and abreast with latest changes/challenges, first thing was done in my office to compile the circulars, material, presentation, checklist and other important documents that may be of important help in planning, execution, working paper documentations and reporting.

To minimise the efforts of all Chartered Accountants engaged in Bank Audit, there is need to create a common resource pool of all Checklists, RBI Circulars, Materials and other documents so that there is no duplicate of the efforts of CA community. With this sole objective to support CA fraternity, the useful resources on bank audit compiled at one place are shared on dropbox for all to use.

More than 100 files of documents/files relating to Bank Audit are stored in 5 folders/categories.  The following is overview of the folders/files stored in resource.

(1) Checklists

Bank Audit Planning and Annexures (Excel), LFAR Checklist (Excel), Bank Audit Format (Excel) and Checklists (pdf),

(2) ICAI Material

ICAI Guidance Note on Bank Audit Ed. 2018, WIRC Manual 2018 – Compiliation of Articles, Relevant Articles relating to Bank Audit published in ICAI Journal

(3) Presentation_Material

Various Presentations and material of faculties/experts on Bank Branch Audit classified into Advances Related, LFAR/Reporting/Planning related, General_Overall and Others

(4) RBI Circulars

All relevant circulars issued during the year 2017-18, Master Circular and Master Directions

(5) Software Guidance

Materials and presentations related to Finacle, CBS and other software.

Link to Bank Statutory Audit 2017-18 Resource:

I am sure that this will be beneficial to large number of Chartered Accountants, with access of all relevant bank audit material at one place and reducing the time of compilation, making it quick and easy access to the files/documents required for efficient bank audit!

Please comment here, if you like this initiative to create common resource pool for all Chartered Accountant or if any file /document to be added /removed from the resource.

About Chintan Patel FCA, CPA(USA), Cert.IFRS(ICAI), CISA (USA), DISA, DIRM

CA Chintan Patel is a partner of Naresh J. Patel & Co. Chartered Accountants ( Key Professional Contributions: Immediate Past Chairman of Ahmedabad Branch of WIRC of ICAI, Co-author of book on Ind AS & ICDS published by Taxmann, Trainer/Faculty at more than 300 seminars/conferences. He has over 15 years of post qualification experience working with SMCs, MNCs on International GAAP, Companies Act, 2013, GST and other advisory.
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10 Responses to Bank Statutory Audit 2017-18 : Useful Resources

  1. Abhijit Dongaonkar says:

    Sirji, Very useful Compilation.


  2. Sanjay says:

    I really appreciate the effort you have taken to compile and share this set of files.
    I can’t thank you enough for this.

    Thank You so much..

  3. Chintan Patel FCA, CPA(USA), Cert.IFRS(ICAI), CISA (USA), DISA, DIRM says:

    Kindly find below the Response by ICAI Bank Audit Expert Panel to my Queries of signing of Engagement letter, Management Representation letter and Accounting standards compliance handled at Central level.

    “1.Is Engagement letter to be issued? If yes can it be received/signed by Bank Branch Manager or to be signed by Audit Department of bank? In case of audit department of bank, it is unlikely to be addressed as there are large number of branches and may not entertain the request.


    As you have stated in the query, signing of Engagement Letter by Audit Dept. will delay the process. The Branch Manager, who has been authorised to sign the financial statements of the entity under audit (i.e. the Branch of the Bank) can sign the Engagement Letter for that Branch.

    2. Management Representation Letter

    Can this be given by Branch manager?


    Same as above. Can be signed by Branch Manager.

    3. Accounting Standards / Auditing Standards compliance

    Large amount of applicability is done at Central Level. In such case of non-compliance of Standards/Regulations at branch level, whether branch auditor to qualify / comment in auditor report even if complied with at Central/HO level?


    The Statutory Branch Auditors can comment on compliance or otherwise of the Accounting Standards, which can be verified at or pertains to expenses / income/ assets etc. controlled at & verified at the Branch. Matters purely pertaining to Head / Central Office (such as gratuity, income tax – current or deferred etc.) will be dealt only at that office and the Auditors need not qualify that compliance of the same can not be verified at Braanch.”

    The clarifications will be immensely useful during finalisation of Statutory Bank Branch Audit Assignments.

  4. Chintan Patel FCA, CPA(USA), Cert.IFRS(ICAI), CISA (USA), DISA, DIRM says:


    Income/Expenditure: Verify:

  5. Chintan Patel FCA, CPA(USA), Cert.IFRS(ICAI), CISA (USA), DISA, DIRM says:


    Cash & bank balances

    - Physically verify the cash balance/ATM cash balance as on March 31, 2017 or reconcile the cash balance from the date of verification to March 31, 2017.
    - Confirm and reconcile the balances with banks as on March 31, 2017.


    - Physically verify the investments held by the branch on behalf of Head Office and issue certificate of physical verification of investments to bank’s Investments Department.
    - Check receipt of interest and its subsequent credit to be given to Head Office.

    Advances provisioning

    - As per RBI norms, unrealised interest on NPA accounts should be reversed and not charged to “Advance Accounts”. Reversal of unrealised interest of previous years in case of NPA accounts is required to be checked.

    - Partial recovery in respect of NPA accounts should be generally appropriated against principal amount in respect of doubtful assets.

    *Fixed assets*

    Check inter-branch transfer memos relating to fixed assets and whether they have been correctly classified in the accounts and depreciation accounting thereof.

    Inter Branch Reconciliation (IBR)

    Understand the IBR system and accordingly prepare an audit plan to review the IBR transactions. The large volume of Inter Branch Transactions and the large number of unreconciled entries in the banking system makes the area fraud-prone.
    - Check up head office inward communication to branch to ascertain date up to which statements relating to inter-branch reconciliation have been sent.
    -Check and report Reversal of any large/old/unexplained entries, which had remained outstanding in IBR.
    - Items of revenue nature, cash-in-transit (for example, cash meant for deposit into currency chest) which remains pending for more than a reasonable period.
    Double responses to the entries in the accounts.
    -Test check accuracy and correctness of “Daily statements” which are prepared by the branch and sent to IOR department.
    The auditor should duly consider the extent of non-reconciliation in forming his opinion on the financial statements. Where the amounts involved are material, the auditor should suitably qualify his audit report. Attention is drawn on the paper on “Certain Significant Aspect of Statutory Audit of banks” issued by the Council of ICAI in March 1994, published in the C. A. journal.

    Further, vide its circular No. BP.BC.22/21…04.018/99 dated March 24, 1999, the Reserve Bank of India (RBI) advised the banks to maintain category-wise (head-wise) accounts for various types of transactions put through inter-branch accounts so that the netting can be done category-wise. Further, RBI advised banks to make 100 percent provision (category-wise) for net debit position in their inter-branch accounts arising out of the unreconciled entries, both debit and credit, outstanding for more than two years.

    Suspense accounts, sundry deposits, etc.

    -Suspense accounts are adjustment accounts in which certain debit transactions are temporarily posted whose authorisation is pending for approval.

    -Sundry Deposit accounts are adjustment accounts in which certain credit transactions are temporarily posted whose authorisation is pending for approval.

    -As and when the transactions are duly authorised by the concerned officials they are posted to the respective accounts and the Suspense account/Sundry Deposit account is credited/debited respectively.

    -Ask for and analyse their year-wise break-up.
    -Check the nature of entries parked in such Accounts.
    -Check any movement in such old balances and whether the same is genuine and has been properly authorised by the competent authority.
    -Check for any revenue items lying in such accounts and whether proper treatment has been given for the same.


  6. gopalan says:

    Great efforts. Very useful

  7. Chintan Patel FCA, CPA(USA), Cert.IFRS(ICAI), CISA (USA), DISA, DIRM says:

    The Auditing and Assurance Standards Board (AASB) of ICAI has set up expert panel for addressing bank branch audit queries – an Online support to our members from April 1st, 2018 till April 15th.
    The queries can be sent at [email protected].

    While emailing the query please take care of the followings:
     Be brief but provide full information and facts.
     Not to mention the name of the Bank or Branch or the name of the Borrower or
    depositor to avoid problem of violation of client confidentiality requirements
    under the ICAI Code of Ethics.
     Avoid rejoinders.
     Not to send the same query twice.
     Draft the report on your own.
     Use own judgment

  8. Ranajit Mukherjee says:

    An excellent & very useful collection that is going to help the auditors to Banks

  9. CA L K GAIKWAD says:

    I welcome this group and hope best posts for branch stat audits

  10. Parag A Shah says:

    Nice presentation

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