The Institute of Chartered Accountants of India (ICAI) has raised apprehensions about the accuracy of the audited financial statements of Allahabad Bank, Vijaya Bank and the Central Bank of India, saying the statutory auditors were under pressure from these banks to complete the audits within unreasonable deadlines.

The accounting rule-maker, which is facing flak after the financial fraud at Satyam, has told RBI that the public sector banks put pressure on the statutory auditors to complete their work within 3-4 days and that such “hurried” audits have left a question-mark on the credibility of the banks’ financial statements.

“I have advised all chartered accountancy firms (doing bank statutory audits) against completing their assignments in undue haste under pressure from banks and signing documents prepared by the branches of the banks without checking them thoroughly,” said ICAI president Uttam Prakash Agarwal. Mr Agarwal said a bank audit requires due diligence of complex transactions and needs 15-20 days to complete.

The statutory auditors of these banks admitted to ET that they were pressured to complete the audits within 3-4 working days through mails and telephone calls. Central Bank of India wanted the audit to be completed by April 8 while Vijaya Bank and Allahabad Bank set deadlines of April 9 and April 10.

There were four bank holidays in the first 10 days of April — bank closing on April 1, Ram Navami on April 3, Sunday (April 5) and Mahavir Jayanti on April 7.

Central Bank of India said in a mailed reply that most of its branches completed their internal closing on March 31 and were ready for audit from April 1.

“We are nobody to exercise any pressure on the auditors, and auditors are at their liberty to do the audit as per their system and norms, which they follow and whatever information they ask is provided to them.” E-mails and phone calls to Vijaya Bank and Allahabad Bank elicited no response.

ICAI took up the issue after complaints from the statutory auditors of the banks. “Many of the details cannot be independently verified in 2-3 days. There is a possibility that the audited statements might not be reflecting a true and fair picture of their financial health,” an auditor, who was on assignment with one of the banks said.

More Under CA, CS, CMA

Posted Under

Category : CA, CS, CMA (3455)
Type : News (12474)
Tags : Audit (420) chartered accountants (519) ICAI (2148) Statutory Audit (106)

0 responses to “ICAI raised doubt on accuracy of audited financial statements of Allahabad Bank, Vijaya Bank and the Central Bank of India”

  1. Santanu Ghosh says:

    1)It must be understood by the bank auditors(whether branch auditor or Central Statutory Auditor) that in the interest of the organisation, that is under audit, they should conduct the audit in accordance with the Standards on Auditing. Even if the bank management pressurises, they should conduct the audit properly and if necessary take up the matter with the ICAI and / or RBI. 2) This rat race of completing the audit within two/three weeks after the close of the year, created by some bank chairmen must be resisted. We must remember that organisation is paramount and not one or more individuals.
    3) What is required is auditors should plan out the audit properly so that approach to audit is meticulous and no time is wasted.
    4 If all auditors, I repeat all, rise to the occassion with dedicated and integrated approach, then I am sure no bank management would be able to create undue pressure on auditors. We must work in unison.

Leave a Reply

Your email address will not be published. Required fields are marked *