Preface to the First Edition

It gives me immense happiness to present the First Edition of ‘Practical Workbook for Statutory Branch Auditors of Banks’ In fact, through experience of about twenty years in auditing especially in auditing of banks, I was feeling an acute need for a book which may not only suggest audit procedures adhering RBI guidelines and ICAI Standards, but may also help meet auditors’ documentation needs simultaneously. By the grace of Almighty, this book is an attempt to meet this need. Statutory branch auditing plays a crucial role in enhancing credibility of financial statements of banks. According to Section 143(9) of the Companies Act, 2013, “Every auditor shall comply with the auditing standards. “Further, requirement of auditor’s reporting of information ‘sought’ and ‘obtained’ has now made documentation of audit procedures paramount importance Plethora of audit reports/certificates and strict datelines to submit the reports demands audit planning in a more effective and efficient manner. Aside enhanced fraud risk particularly in Advances area has created a need for being more alert and for applying enhanced professional skepticism throughout the audit.

While deciding over the structure and contents of the book, I was in little dilemma, whether it should be a reference book or a procedures manual. Finally, I decided to write a book that could work as audit work programme cum audit note book with suggested procedures and all relevant references. Of course, I have been able to use several contents of my book ‘Bank Concurrent Audit Procedures Manual’. Yet, to keep the contents tight focused and compact confining to financial statements’ audit, background information on banking operations

I-9 and processes have been skipped, as the book is meant for practitioners.

The aim and the approach of writing the book has been to help branch auditors understand ‘What to do’ and ‘How to do’ in an efficient and effective manner besides the simultaneous documentation of procedures undertaken. ‘What to do’ is chiefly based on statutory requirements and RBI guidelines, while in how to do’, ICAI Standards on Auditing (SAs) and current CBS environment have been kept in mind.

Apart from the audit procedures suggested, salient features of this workbook include: Staged Approach Suggested

Preface to the Seventh Edition

During the past year, RBI has come out with several new directions/guidelines, guidelines on digital lending, housing finance and outsourcing of financial services. To improve banks’ financial reporting, on 1st April, 2022 RBI came out with new Master Circulars on Income Recognition, Asset Classification and Provisioning (IRACP) and on Basel II Capital Regulations. Amongst others, modified KCC Interest Subvention Scheme (ISS) and the new definition of MSME are few of the relevant amendments during the year by Govt. of India.

In the light of all these changes, I have revised the respective chapters accordingly. In view of the several modified IRACP norms by RBI, chapter ‘Audit of Income Recognition, Asset Classification and Provisioning’ has been revised thoroughly. Of course, I have been able to use several contents of my book ‘Bank Concurrent Audit Procedures Manual’. However, to confine myself with statutory branch auditing, procedures on auditing of operations have been skipped. I have made all possible efforts to make the workbook a one-stop reference for branch auditors and to keep the contents complete and current. I believe branch auditors will find the workbook a good help in their audits. As it is a live document, auditors are suggested to refer extant updates while auditing. Human errors and omissions are quite natural and I am confident readers are kind enough to ignore.

All constructive feedback/comments from the auditors are most welcome and will be gratefully acknowledged. While revising the edition, I have referred several sources including ICAI Guidance Note on audit of banks, RBI notifications and others. I am grateful to all such sources.