Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Class:
M.COM -2
Roll no:
22
Subject:
ADVANCED AUDITING
Topic:
AUDIT ON BANK
Semester:
3rd
Academic
Year:
2016-2017
DECLARATION
I, Purswani Deepa the student of J.W.SADHUBELLA GIRLS
COLLEGE M.COM Part 2, hereby declare that I have
completed this project AUDIT ON BANK in the academic
year 2016-2017.The Information submitted is true and original
to the best of my knowledge.
---------------------Students Signature
CERTIFICATE
I, PROF, KIRAN MENGHANI hereby certify that DEEPA
PURSWANI of M.COM PART 2 Master of Commerce of
J.W.SADHUBELLA GIRLS COLLEGE Ulhasnagar-421001 has
completed the project entitled AUDIT ON BANK in the
academic year 2016-17 under my guidance.
The Information submitted is true and original to the best of my
knowledge.
(Project Guide)
(Co-ordinator)
(Principal I/C)
External examiner
ACKNOWLEDGEMENT
I take this opportunity to present a sense of gratitude
towards my project guide PROF KIRAN MENGHANI for
her excellent guidance and letting me know about the
topic provided AUDIT ON BANK and personal guidance
have provided a good basic for my project.
I would also like to thank college authorities, our
principal, Co-ordinator and subject guide for authorizing
my project.
AUDIT
ON
BANK
INDEX
6
Sr. No
Topics
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Pg.No
INTRODUCTION
ORIGIN &
EVOLUTION OF
AUDITING
DEFINITION OF
AUDITING
BASIC PRINCIPAL OF
AUDITING
AUDIT COMMITTEE
ADVANTAGES OF
AUDITING
LIMITATIONS OF
AUDITING
STAGES IN AUDITING
BOOKS OF
ACCOUNTS OF
BANKS
TYPE OF AUDIT IN
BANK
WHAT IS BANK
FEATURES OF BANK
UNION BANK OF
INDIA
HISTORY
MANAGEMENT
UNION BANK
AUDITORS REPORT
OF UNION BANK OF
INDIA
CONCLUSION
BIBLOGRAPHY
09
10
12
13
15
17
19
20
28
30
33
34
35
37
38
39
44
45
BANK.
INTRODUCTION
The audit of banking companies plays a very important role in
India as it help to regulate the banking companies in right manner. In
audit of banks includes various types of audit which are normally carried
out in banking companies such as statutory audit, revenue/income
expenditure audit, concurrent audit, computer and system audit etc. the
above audit is mainly conducted by the banks own staff or external
auditor. However, the rules and the regulation relating to the conduct of
various types of audit or inspections differ from a bank to bank expect
the statutory audit for which the RBI guidelines is applicable. In this, I
have given more importance on the overall bank audit system. In todays
competitive world audit is very much necessary as well as compulsory ,
because investor investing decision is depend on that particular concept
if auditor has expressing his view about particular organization is true
and fair then investor can get his ideas about how much he should invest
in particular companies.
of term:
The term audit is derived from the Latin term audire mean to
hear. In early days, an auditor used to listing to the account read out
by the accountant in order to check them.
2. Ancient
origin:
4. Development
technology:
11
DEFINITION OF AUDITING
Various persons such as the owners, shareholders, investors,
creditors, lenders, government etc. use the final account of business
concern for different purposes. All these users need to be sure that the
final accounts prepared by the management are reliable. An auditor is an
independent expert who examines the accounts of a business concern
and reports whether the final accounts are reliable or not. Different
authorities have defined auditing as follows.
Mautz define the auditing as auditing is concerned with the
verification of accounting data, with determining the accuracy and
reliability of accounting statement and reports.
International auditing guidelines defines the auditing as
auditing is an independent examination of financial information of
any entity with a view to expressing an opinion thereon.
12
and independence:
4. Working papers:
The auditor should maintain working papers of important
matters to prove that audit was conducted with due care according to
the basic principles.
13
5. Planning:
6. Audit evidence:
The report of the auditor should be base on evidence obtained in
the course of audit. The evidence may be obtained through vouching
of transactions, verification of assets and liabilities, ratio analysis etc.
14
AUDIT COMMITTEE
In pursuance of RBI circular September 26, 1995, a bank is required to
constitute an Audit Committee of its Board. The membership of the audit
committee is restricted to the Executive Director, nominees of Central
Government and the RBI, Chartered Accountant director and one of the
non-official directors.
One of the functions of this committee is to provide direction and
oversees the operations of the total audit function in the bank. The
committee also has to review the internal inspection function in the
bank, with special emphasis on the system, its quality and effectiveness
in terms of follow up. The committee has to review the system of
appointment and remuneration of concurrent auditors.
The audit committee is, therefore, connected with the functioning of the
system of concurrent audit. The method of appointment of auditors, their
remuneration and the quality of their work is to be reviewed by the Audit
Committee. It is in this context that periodical meeting by the members
of the audit committee with the concurrent auditors help the audit
committee to oversee the operations of the total audit function in the
bank.
15
16
ADVANTAGES OF AUDITING
17
18
LIMITATIONS OF AUDITING
3. An auditor
19
STAGES IN AUDITING
1) Preliminary work:
a) The auditor should acquire knowledge of the regulatory
environment in which the bank operates. Thus, the auditor should
familiarize himself with the relevant provisions of applicable laws
and ascertain the scope of his duties and responsibilities in
accordance with such laws. He should be well acquainted with the
provisions of the Banking Regulation act, 1956 in the case of audit
of a banking company as far as they relate of preparation and
presentation of financial statements and their audit.
I.
II.
III.
f) One set of tests that the auditor at both the branch level and head
office level may apply for audit of banks in analytical procedure.
more appropriate that the evaluation of the internal control is made for
each class/category of transaction. If the exercise of internal control
evaluation is properly carried out, it assist the auditor to determine the
effectiveness or otherwise of the control systems and accordingly enable
him to strengthen his audit procedures, and lay appropriate emphasis on
the risk prone areas. Internal control would include accounting control
administrative controls.
a) Accounting controls:
Accounting controls cover areas directly concerned with recording of
financial transactions and maintenance of such registers/records as to
ensure their reliability.
23
II.
III.
IV.
The auditor would be well advised to look into other areas may
lead to detection of errors, omissions and irregularities, inter
alias in the following:
I.
II.
24
IV.
or
upon
non-honoring
of
contracts/commitments.
V.
irregularities
pointer
out
in
internal
audit/inspection/special audit
b) Administrative control:
These are broadly concerned with the decision making process and
laying down of authority/delegation of powers by the management. It
may be noted that in the normal course, the head office use the
zonal/regional offices do not conduct any banking business. They are
25
4.
The branch auditor forwards his report to the statutory auditors who
have to deal with the same in such manner, as they considered necessary.
It is desirable that the branch auditors reports are adequately in
26
27
B.
C.
D.
29
2. Internal audit:
Banks generally have a well-organized system of internal audit. There
internal auditors pay frequent visit to the branches. They are an
important link in internal control of the bank. The systems of internal
audit in different banks also have a system of regular inspection of
branches and head office. A separate department within the banks by
firms of chartered accountants carries out the internal audit and
inspection function.
30
3. Concurrent audit:
Concurrent audit is the system which introduced by the RBI with the
view that interval between the occurrence of transaction and its over
view kept to the minimum extent and examination of transactions by the
auditors take place as soon as the transaction take place. It has perceived
the effective means of control. The main view of concurrent auditors is
to see that the transactions are properly recorded, documented and
vouched.
4. System audit:
In todays technological advancements, banking companies are using a
well-organized computer system to perform their transactions. So, it is
very necessary to conduct system audit in order to evaluate the
computer system for effectiveness.
5. Revenue audit:
Revenue audit refers to the audit of revenues/ incomes. In revenue audit
of banking companies, auditors go through the various sources of
revenues from which bank earn income. In revenue audit of banks, the
auditor inspects that all the records are showing true and fair picture of
revenues or not.
32
What is a Bank?
Definition of a Bank
Oxford Dictionary defines a bank as "an establishment for custody of
money, which it pays out on customer's order."
33
3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are
usually repayable on demand or after the expiry of a fixed period. It
gives safety to the deposits of its customers. It also acts as a custodian of
funds of its customers.
4. Giving Advances
A bank lends out money in the form of loans to those who require it for
different purposes.
34
Type
Industry
Financial services
Headquart
Mumbai, India
ers
Key people
D. Sarkar
(Chairman & MD)
Revenue
1,787 crore
Net income (US$323.45 million)
(2012)
Employees 27,746 (2011)
Website
www.unionbankofindia
35
.co.in
36
History
Union Bank of India (UBI) was registered on 11 November 1919 as a
limited company in Mumbai and was inaugurated by Mahatma Gandhi.
At the time of India's Independence in 1947, UBI still only had four
branches - three in Mumbai and one in Saurashtra, all concentrated in
key trade centres. After Independence UBI accelerated its growth and by
the time the government nationalized it in 1969, it had grown to 240
branches in 28 states. Shortly after nationalization, UBI merged in
Belgaum Bank, a private sector bank established in 1930 that had itself
merged in a bank in 1964, the Shri Jadeya Shankarling Bank. Then in
1985 UBI merged in Miraj State Bank, which had been established in
1929. In 1999 the Reserve Bank of India requested that UBI acquire
Sikkim Bank in a rescue after extensive irregularities had been
discovered at the non-scheduled bank. Sikkim Bank had eight branches
located in the North-east, which was attractive to UBI.
UBI began its international expansion in 2007 with the opening of
representative offices in Abu Dhabi, United Arab Emirates, and
Shanghai, Peoples Republic of China. The next year, UBI established a
branch in Hong Kong, its first branch outside India. In 2009, UBI
opened a representative office in Sydney, Australia.
37
Designation
D Sarkar
Executive Director
B M Sharma
Director
N Shankar
Director
S Ravi
Director
M V Nair
Director
S S Mundra
Executive Director
Chandan Sinha
Director
Director
M S Sriram
Director
Atul Agarwal
Director
A Bhattacharya
Director
38
39
12
(i) the Balance Sheet, read with the notes thereon is a full and fair
Balance Sheet containing all the necessary particulars, is properly drawn
up so as to exhibit a true and fair view of state of affairs of the Bank as at
31st March 2013 in conformity with accounting principles generally
accepted in India;
(ii) the Profit and Loss Account, read with the notes thereon shows a true
balance of profit, in conformity with accounting principles generally
accepted in India, for the year covered by the account; and
(iii) The Cash Flow Statement gives a true and fair view of the cash flows
for the year ended on that date.
DBOD.BP.bC/80/21.04.018/2010-11 dated February 9, 2011) on reopening of Pension Option to Employees of Public Sector Banks.
8. The Balance Sheet and the Profit and Loss Account have been drawn
up in Forms A and B respectively of the Third Schedule to the Banking
Regulation Act, 1949.
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief, were necessary for the purposes of our
audit and have found them to be satisfactory.
(b) The transactions of the Bank, which have come to our notice, have
42
(c) The returns received from the offices and branches of the Bank have
been found adequate for the purposes of our audit.
10. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the applicable accounting standards.
43
CONCLUSION
The project the position of Indian banking system as well as the
principal lay down by the Basel Committee on banking supervision. This
assessment was done in seven major areas, which are core principals,
concurrent audit, internal audit, deposit, loan accounting and
transparency and foreign exchange transaction. The project concluded
that, given the complexity and development of Indian banking sector, the
overall level of compliances with the standards and codes is of high
order. This project gives the correct ideas about how the major areas can
be found by way of effective auditing system i.e. errors, frauds,
manipulations etc.. Project also contain that how to conduct of audit of
the banks, what are the various procedure through which audit of banks
should be done. Form auditing point of view, there is proper follow up of
work done in every organization whether it is banking company or any
other company or any other company there no misconduct of
transactions is taken places for that purpose the auditing is very
important aspect in todays scenario form company and point of view.
44
BIBLOGRAPHY
www.scribd.com
(For various documents relating to subject)
www.moneycontrol.com
www.icai.org
www.businessdictionary.com
accounting-simplified.com
45