Guidance Note on Audit of Banks 2017 edition issued by the Auditing and Assurance Standards Board – (27-02-2017)

As you all are aware that the Bank Statutory Audit season is just around the corner, I take this opportunity to place in your hands, the Guidance Note on Audit of Banks – 2017 edition, issued by Auditing and Assurance Standards Board of ICAI.

In recent past, there has been a remarkable change in the nature, volume and spread of transactions of banks. The non-traditional functions of banks, e.g., foreign exchange activities, merchant banking, portfolio management, investment, etc., have acquired considerable importance during this period. The focus has increased on the “audit through the computer” instead the “audit around the computer”. The increasing trend of NPAs has put more pressure on the auditors as well to put additional expert hand on bank audit.

The Guidance Note provides an insight into the banking industry in India. It makes a clear distinction between audit at Branch level and Head office level and also elaborates on general considerations in audit of Banks at Head Office/Branch level. Since the issuance of the last edition of the Guidance Note in 2016, apart from the Master Directions and Circulars issued by RBI, certain important developments have also taken place in the banking sector, including the recent demonetization, warranting appropriate attention of the auditors. It is, therefore, essential that the members undertaking statutory audit of banks, both at the branch as well as the central level, keep themselves abreast with the latest developments in the banking sector and carry out their audit functions.

It also discusses in depth the various important items on the financial statements of a bank, its peculiarities, manner of disclosure in the financial statements, the RBI prudential directions thereon, audit procedures, etc.  The full text of the Guidance Note on Audit of Banks 2017 edition and the contents of the accompanying CD (Appendices etc) are available on ICAI’s website and can be downloaded free of charge from  Links:-

The Guidance Note will also soon be available in the printed book form at the ICAI’s sales counters near you at a very nominal price of Rs. 350/-.

I am sure that you will find the Guidance Note useful companion in your bank/ bank branch audit assignments.

I would also like to inform you that the Board will constitute a panel of expert to answer the specific queries of the members related to Bank Statutory Audit during first half of April, 2017.

Warm regards,

Auditing & Assurance Standards Board
The Institute of Chartered Accountants of India

Source- ICAI

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