The remote audit also may be referred to as E Auditing is exactly same as an audit but in involves use of electronic means to collect Audit Evidence.
Remote Auditing techniques involve sharing files via email, Google drive etc., providing documents by sharing its desktop screen or via video conferencing using Skype, Zoom, WhatsApp, WebEx etc.
Considering and analyzing the existing human, economic and social crisis and also casting mind back to announcement made by RBI with reference to circular DBS.CO.ARS.No.BC.2/ 08.91.021/2015-16 that it will also review the quality of audit already done by the Auditor it shall be tough time for auditor to complete qualitative audit in a period of 3 to 4 days. Inter-state barriers are another challenge for auditors. Completion of Bank audit appears to be a major challenge as one month has passed by; still the bank audit has not been completed.
Following are some of the remedies that may enable the Bank auditor to complete the audit when the movement is also prohibited and also there are transportation barriers:
→ The auditors may ask the Banks to allow them access to the required data and documents through electronic mode or access to the data available in Core Banking Solution (CBS).
→ The auditors may create a Feasible WhatsApp group or telegram group to ensure a viable communication system ensuring that confidentiality is not compromised.
→ CCTV footage of banks may be accessed to establish fraud checks
→ The Auditors may ask the bank officials to mail the necessary documents:
→ The auditor may ask for financial statements for the previous year on mail from branch officials and can conduct ratio analysis and decide level of test checking can conduct ratio analysis and decide level of test checking by comparing the current year and previous year figures.
→ Divergent trend may be analyzed in major heads of income and expenditure and ensuring proper classification of items.
→ The auditor may ask scanned copies of following certificates and statements:
1. Physical verification of Investments.
2. Physical verification of Fixed Assets carried out by Branch.
3. NPA statement, Profit & loss account, Balance sheet & Trial balance certified by branch manager
4. Management representation letter
→ For review of documents auditor may hire Article assistants located in the places where Branch is located who can review the documents and report to the auditor of discrepancies E.g.: physical verification of cash, verification of opening balances in GL with previous year audited balance sheet figures, timely submission of documents, stock statements, Verification of locker rent etc.
→ Video calls shall be an important method of reviewing documents by the auditor.
→ Draft reports may be discussed on calls and mails and the auditor may act accordingly by giving appropriate elucidations and comments.
This is NOT an exhaustive list for conducting remote Bank audit and complying with all the regulations. In this tough time, it is expected that remote auditing will be a center of strife both for the auditors and Banks. Also, it shall be a major challenge for auditors to prove valued trustees of world class financial competence.