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NIGDI - PUNE- 411044
BATCH – 2018-2020

I SACHIN RAMDAS PACHARNE, of MBA SYMBAFIN17, hereby declare that the project work
BANK LTD.” which has been submitted to SAVITRIBAI PHULE PUNE UNIVERSITY, is an
original work of the undersigned and has not been reproduced from any other sources and has not been
submitted to any university.

Signature of student


Date :

Place: Nigdi,Pune

I would like to thanks to Mr. Yogesh Tanpure &Mrs. Samiksha Tanpure from “Yogesh Tanpure and
Associates, Chartered Accountants” for giving me the opportunity to work on a project which has a lot in store
for me in terms of experience and learning. I would also like to thanks Pimpri Chinchwad Collage Of
Engeeinering,Pune. For providing me the platform for learning and home sting my skill that enabled me to put
in my best efforts into this work.
I would like to present my sincere gratitude to ward our principal sir. Dr.A.M. Fulambarkar sir for his
moral support to our department in any activity & the one to whom I owe my success is our Head of department
Dr.Anuja Johri ma’am & my project guide Prof. Chetan Patil sir for walking the steps of failure & success with
me anytime. I again Thanks all of the personals & Individuals that has even small amount of contribution in my



Sr. No TOPIC Page No












A Summer Internship Project is important part of every MBA program. It helps you to have a real
insight into corporate world. An internship enables us to gear up for the career ahead of us. All the theory that
we have learnt in our curriculum is put into practices during Internship.

It gives depth knowledge of our specialization and helps us groom ourselves accordingly. It gives us
clear picture of the basic fundamentals. So what we can relate what we have learn to what is applied. It builds
our confidence and self-assurance.

In this project, an attempt is made to study the procedure of Bank audit while doing audit of
“RAJGURUNAGAR SAHAKARI BANK LTD.” This topic was selected for study due to the increased
importance of auditing in promoting transparency in financial reporting amidst the increasing complexities of
Bank opening.
A banking companies are requires maintaining the books of account in accordance with section 209 of
the companies act, 1956. Banking generally a sound internal control system their day to day transaction. The
auditor has to evaluate such system carefully. The fundamental requirement of an audit, as regards reporting on
statement of account can be discharged from the examination of the internal checked and verification of assets
and liabilities by making a comparison and reconciliation of balance with those in the year and that of amount of
income and expenses by application of test checks. The banking regulation act casts greater responsibilities on
the directors of banks as compared to those of other companies in the matter of supervision over their working.
Therefore, they exercise, or are expected to exercise greater supervision over the affairs of bank. The auditor is
entities to rely on such supervision and to limit his checking to test checks. The financial position of a bank is
depended on the condition of assets, loan, investment, cash balanced and those of its liabilities and fund. Their
verification form an important part of the balance sheet. Most of the bank have their own internal audit or
inspection department entrusted with the responsibilities of checking the account of various branches. The
statutory auditor may not, therefore duplicate work.


“CA. Yogesh Tanpure Associate” is a professionally managed firm of Chartered

Accountants established in 2011 with an objective to provide multidimensional Services in the field of
corporate, legal and taxation laws and having branches in Chakan and Bhosari. The team consists of
various professionals like Chartered Accountants, Cost Accountants, Lawyers, Financial Advisors and
other experts. This synergy of professionals from varied backgrounds places us in a unique Position to
provide unique solutions.
“CA. Yogesh Tanpure Associate” offer the clients an incisive understanding of the Indian legal,
regulatory and audit environment that enables them to avoid the Difficulties encountered in the course of
doing business. Moreover, it also structure Transactions and tailor advice in a manner designed to avoid
litigation or arbitration. We hold dear our commitment to excellence in the public practice as chartered
Accountants as much as we hold our reputation as counsel of confidence to our clients Doing business in


We aim to use our knowledge for the benefit and growth of our client’s business. We also aim to go
beyond the conventional realm of compliance and advisory services and to provide maximum value
additions and support to clients. We are determined not only to provide solutions but also to strive and
assist clients for their implementation.

• List of Partners: -

Sr no Name of Partners Role

1 CA. Yogesh Tanpure. Partner

2 Samiksha Tanpure. Team-


3 CA. Ganesh Shinde. Partner

 Services provided by the Firm: -

A. Audit
1. Tax Audit
2. Statutory Audit
3. Internal Audit
4. Bank Audit
5. System Audit

B. Direct & Indirect Tax Advisory & Compliances Services

1. Income Tax
2. Filing of return
3. Tax Planning
4. T D S
5. Sales Tax & Professional Tax

C. Other Services
1. Project Report & Financing
2. Amalgamation & Merger
3. Loss Assessors For Insurances Companies
4. Shop Act Registration
5. Preparation & Registration related services of Partnership deed.

Rajgurunagar Sahakari Bank Limited is

established in the , Rajgurunagar.
Founder of Hon'ble Parshuram Alias
Dadasaheb Apte. Rajgurunagar Sahakari
Bank Limited is a major Indian Co-
operative bank with its headquarters in
Rajgurunagar Pune. The bank has over
16 branches. Total Asset 117CR.
Rajgurunagar Sahakari Bank Limited
provides all the financial services
includes savings accounts, current
accounts, deposits, safe deposit lockers, personal loans, home/car loans, two wheeler loans, educational loans,
debit/credit cards, prepaid cards, demat accounts, insurances, forex, premier banking, and more. On the website,
one can easily pay bills, make credit card payments, transfer funds, access net banking and much more.

The bank began operations in with a simple mission: to be a "World-class Indian Bank". For queries, complaints
or others, reach the Rajgurunagar Sahakari Bank Limited customer care between 9 a.m. to 6 p.m. from Monday
to Friday. It provides all the financial services to its customers like saving deposit, fixed deposit, recurring
deposit, home loan, car loan, personal loan, PPF account, SMS banking, lockers, netbanking, mobile banking,
RTGS, NEFT, IMPS, E-Wallet, Atal Pension Yojana, Pradhan Mantri Jandhan Yojana, Pradhan Mantri
Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and many more.

Find below list of Rajgurunagar Sahakari Bank Limited branches including bank address, branch name, phone
number, district and state. You can find contact number and detailed information of Rajgurunagar Sahakari
Bank Limited across India.

Branch Wise Contact Numbers of Rajgurunagar Sahakari Bank Limited

Contact Number Branch District State

233285 Alandi Alandi Maharashtra

263085 Alephata Alephata Maharashtra

27110210 Bhosari Bhosari Maharashtra

9850788794 Akurdi PCMC Maharashtra

24463132 Budhwar Peth Pune Maharashtra

249213 Chakan Chakan Maharashtra

27673011 Dehu Road Dehu Road Maharashtra

222275 Junnar Junnar Maharashtra

282244 Kadus Rajgurunagar Maharashtra

223716 Manchar Manchar Maharashtra

259059 Mhalunge Ingale Mhalunge Ingale Maharashtra

242075 Narayangaon Narayangaon Maharashtra

9766875307 Pabal Pabal Maharashtra

8149022441 Pait Khed Maharashtra

224800 Shirur Shirur Maharashtra

222058 Tilak Chowk Rajgurunagar Maharashtra

Purpose of the Project: -

The topic “A Study Audit Procedure at Yogesh Tanpure Associate with Ref to Rajgurunagar sahakari
bank ltd.” was my study because of two reasons:

1. Auditing is an important practice in almost every sector, to promote transparency in the financial
reporting of the entity, making it necessary for auditor to have a check on the internal control and
accounting framework for the benefit of proprietors and Bank customer

2. Secondly, the area of auditing has a vast scope and as a student of finance must have knowledge of the
current scenario of audit process prevalent in bank. I was delighted to get an opportunity to understand
and gain practical experience in bank Audit.


1. To understand the procedure of Bank auditing.

2. To understand the role and responsibility of an auditor.
3. To study and gain practical experience of the Bank audit procedure.
4. To examine books of accounts, records and registers to ensure that they are maintained in accordance
with the prescribed systems.

1) Verification of daily cash transaction with reference to abnormal receipt and payment.
2) Verification of Documentation and KYC in respect of opening of accounts such as Current account
and saving account .

3) Verification of documentation and sanctioning of loan and advances.

4) Verification of return statement calculation of capital adequacy ratio.

5) Verification of inter branch reconciliation interest discount of commission

6) Verification of high value.

7) Revenue of leakages.

8) Procedure for safe custody of security forms with the branch.

9) Procedure of TDS complaint of customer dealt properly.



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 include 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 auditors. However, the
rules and the regulation relating to the conduct of various types of audit or inspection 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 today’s 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.


1) Origin 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:
Auditing is as old as accounting. It was in use in all ancient countries such as Mesopotamia, Egypt,
Greece, U.K., and India. The Vedas, Ramayana Mahabharata contain references to accounting and
auditing. Arthashasastra by Kautilya gives detailed rules for accounting and auditing of public finance.
The Mauryas, the guptas and the Mughals had developed and accounting and auditing system to control
state finances. Thus basically, accounting and auditing had their origin in the need for the government to
control the income and expenditure of the state and army. The original object of auditing was to detect
and prevent errors and frauds.

3) Compulsory audits of companies:

With increasing number of companies, the companies' acts in different countries began providing for
compulsory audit of accounts of companies. Thus U.K. audit of accounts of limited companies became
compulsory in 1900. In India, the companies act, 1913 made audit of company accounts compulsory. With
increase in size of companies, the object of audit also shifted to ascertaining whether the accounts were "true
and fair" rather than "true and correct". Thus, the emphasis was not arithmetical accuracy but on fair
representation of financial affairs.

4) Development of accounting and auditing standard:

The international accounting standards committee and the accounting standards board of institute of chartered
accountant of India have developed standard accounting and auditing practices to guide the accountants and
auditor in their day-to-day work

5) Computer technology:

The latest development in auditing pertains to the use of computers in accounting as well as auditing really,
auditing has come a long way from "hearing" the accounts in the ancient day to using computers to examine
computerized accounts of today.


‘Audit’ or ‘Auditing’ is an activity which is undertaken by any business organization on its own or by
the requirement under any law – to go through its accounts, transactions, and documents – to ensure
correctness, legality of it.

It is an examination of the accounts and can be conducted by internal or external agencies – known as
the auditors.

a) Audit is the examination or inspection of various books of accounts by an auditor followed by physical
checking of inventory to make sure that all departments are following documented system of recording
transactions. It is done to ascertain the accuracy of financial statements provided by the organization.

b) 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.”

c) International auditing guidelines defines the “auditing is an independent examination of financial

information of any entity with a view to expressing an opinion thereon”.


1) Integrity, objectivity and independence:

The auditor should be honest and sincere in his audit work. He must be fair and objective. He should
also be independent.

2) Confidentiality:

The auditor should keep the information obtained during audit, confidential. He should not disclose
such information to any third party. He should , keep his eyes and ears open but his mouth shut.

3) Skill and competence:

The auditor should have adequate training, experience and competence in auditing. He should have a
professional qualification (i.e. be a Chartered Accountant) and practical experience. He should be aware
of recent development in the field of auditing such as statement of ICAI, changes in company law,
decision of courts etc.

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.

5) Planning:

The auditor should plan his audit work. He should prepare an audit programmed to complete the audit
efficiently and in time.

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.

7) Evaluation of accounting system and internal control:

The auditor should ensure that the accounting system is adequate. He should see that all the transaction
have been properly recorded. He should study and evaluate the internal controls.

8) Opinion and report:

The auditor should arrive at his opinion on the account based on the audit evidence and submit his
report. The opinion may be unqualified, qualified or adverse. The audit report should clearly express his
opinion. Law should require the content and form of audit report.

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 the operations
of the total audit function in the bank. Considering the coverage of this audit assignment and the specialized
nature of work there is also a need for training to be imported to the staff of the auditors. This training has to be
given in specialized field such as foreign exchange, computerization, and areas of income leakage, fraud prone
areas, determination of credit rating and other similar specialized areas. The bank can organize such training
programmed at various places so that it can ensure the quality of audit.

Appointment of auditors.

1) Banking co.:- auditor appointment by the General Manager and Stakeholders. Approval by reserve bank of

2) Nationalized Bank:- Bank itself appoint of auditor means of Board of director. Approval by reserve bank of

3) Regional rural bank:- auditor appointment by board of director. Approval by Central government

4) State Bank of India:- auditor appointment by the CAG (controller and auditor general of India) No Approval
by this bank.

1) Assurance of true and fair accounts:

Audit provides an assurance to the various users of final accounts such as owners, management, creditors,
lenders, investors, government's etc. that the accounts are true and fair.

2) True and Fair balance sheet:

The user accounts can be sure that the assets and liabilities shown in the audited balance sheet show the
concern, as it is i.e. neither more nor less.

3) True and fair profit and loss account:

The user can be confident that the audited profit and loss account shows the true amount of profit or loss as it is
i.e. neither more nor less.

4) Tally with books:

The audited final account can be taken to tally with the books of accounts. Thus, the income-tax officer can start
with the figure of audited books profit, make adjustments and compute the taxable income. An outside user need
not go through the entire books.

5) As per standard accounting and auditing practices:

The audited final accounts follow the standard accounting and auditing principles laid down by professional
bodies. Thus, audited accounts are based on objectives standard and not on personal whims and fancies of a
particular accountant or auditor.
6) Detection and prevention of errors and frauds: Audited accounts can be assumed reasonably free from errors
and frauds. The auditor with his expert knowledge would take due care to see that Errors and frauds are detected
so that the accounts shoe a true and fair view.

7) Advice on system, taxation, finance:

The auditor can also advise the client about the accounting system internal control, internal check, internal audit,
taxation, finances etc.


1. An auditor cannot check each and every transaction he has to check only the selected areas and transaction on
a sample basis.

2. Audit evidence is not conclusive in nature thus confirmation by a debtor is not conclusive evidence that the
amount will be collected. It is said evidence is rather than conclusive in nature.

3. An auditor cannot be expected to discover deeply laid frauds usually involves acts designed to conceal them
such as forgery , celibate failure to record transactions, false explanation and hence are difficult to detect.

4 Audit cannot assure the users of account about the future profitability prospects or the efficiency of the

5. An auditor has to rely upon expert auditor may have to rely on expert in related field such as lawyers,
engineers, value's etc. for estimating contingent liabilities, valuation of fixed assets etc.


 The staff and officer of a bank should lift form one position to another frequently and without prior
 The work of one person should always be checked by another person in the normal course of business
 All arithmetical accuracy of the book should be proved independently every day
 All bank form (e.g. books, demand draft book, 'travellers' cheque, etc.) should bee kept in the possession
of an officer, and another responsible officer should occasionally verify the stock of such stationary
 The mail should be opened by responsible officers. Signature on all the letters and advice received from
other branches of the bank or its correspondence should be checked by an officer with signature book
 The signature book of the telegraphic codebook should be kept with responsible officers, used, and seen
by authorized officers only
 The bank should take out insurance policies against loss and employees infidelity
 The power of officers of different grade should be clearly defined. There should be surprise inspection of
office and branches at periodic interval by the internal audit department. The irregularities pointed out in
the inspection reports should be promptly rectified.


 Cash should be kept in the joint custody of two responsible people.

 In addition to normal checking by the chief cashier, cash should be test checked daily and counted in full
occasionally by responsible officers unconnected with the balanced shown the balanced shown by the
daybook every day.
 The cashier should have no access to the ledger account and the daybook. This is an important
safeguard. Bank management are often tempted to used cashier because of their shorter working hours as
a ledger clerks in the absence of regular staff on leave, etc. This cash can be a very expensive price of

 Cheques received by the bank in clearing should with the list accompanying them independent list
should be prepared for cheques debited to different customers account and those return unpaid and these
should be checked by officers.
 The total numbered and amount of cheques sent out the bank for clearing should be agreed with the total
of the clearing pay-in-slip, by an independent person
 The unpaid cheques received back return clearing should be checked in the same manner as the cheques

Constituent ledger:

 Before making payment, cheques should properly checked in respect of signature, date, balanced in hand
etc. and should be passed by an officers and entered into constituent's account
 No withdrawal should normally be allowed against cheques deposited on the same day.
 An officer should check all the entries made in the ledger with the original document particularly
nothing that the correct account have been debited or credited.
 Ledger keeper should not have access to voucher summary sheet after they have been checked by an
officer and to the daybook
 Interest debited or credited to constituent account should be independently checked.

Bill of collection:

 All documents accompanying the bill should be received and entered in the register by a responsible
officer. All the time of dispatch, the officer should also see that all document sent along with the bills
 The account of customers or principals should be credited only after bills have been collected or an
advice to that effect received form the branch or agent to which they were sent for collection.
 It should be ensured that bills sent by one, branch for collection to another branch of the bank, are not in
the collection twice in the amalgamated balance sheet of the bank. For this purpose, the receiving branch
should reverse the entries such as bills at the end of the receiving branch at the end of the year fir closing

Bill Purchased:

 At the time of purchased of bill, an officer should verify that all the document of titles are properly
assigned to the bank
 Sufficient margin should be kept while purchased or discounting a bill to cover any decline in the value
of the security etc.
 If the bank is unable to collect a bill on the due date, immediately step should be taken to recoveries the
amount form the drawer against the security provided.
 All irregular outstanding account should be reported to the head office.
 In the case of purchased outstanding at the close of the year discount received thereon should thereon
should be properly apportioned between years.

Loan and advances:

 The bank should make advances only after satisfying itself as to the creditworthiness of the borrowers
and after obtaining sanction from the proper authorities of bank.
 The entire necessary document (e.g. agreement, demand promissory note, letter of hypothecation etc.)
 Sufficient margin should be kept against securities taken to cover any decline in the value thereof and
also to comply with proper authorities of directives. Such margin should be determined by the proper
authorities of the bank as a general policy or for particular account.
 All the securities should be received and returned by responsible officer. They should be kept in the joint
custody of two such officer.
 In the case of good in possession of the bank, content of the package should be test checked at the time
of receipt.
 Surprise check should be made in respect of hypothecated goods not in the possession of the bank.
 Market value of good should be checked by officer of the bank by personal enquiry in addition to the
invoice to the invoice value given by the borrowers.
 As soon as any increased or decreased takes take place in the value of securities proper entries should be
made in the drawing power book. And daily balance book. These entries should be checked by an officer
 All account should be kept within both the drawing power and the sanctioned limit at all times.
 At the account, which exceed the sanctioned limit or drawing power or are against unapproved securities
or are otherwise irregular, should be brought to the notice of the management/head office regularly.

Demand draft:

 The signature on demand draft should be checked by an officer with signature book.
 All the best demand draft sold by should be immediately confirmed by the advice to the branches
 If the branches does not receive does not received proper confirmation of ant demand draft form the
issuing branch or does not. received credit in its account with that branches, it should take immediate
step to ascertain the reason.

Inter branch account:

 The account should be adjusted only on the basis of application with reasonably good credit assessment
 Prompt action should be taken preferably by central authorities, if any entries are not reasonably time.

Credit card operation:

 There should be effective screening of application with reasonably good credit assessment
 There should be strict control over storage and issues of card.
 There should be at system whereby a merchant confirm the statues of utilized limit of a credit card
holder form the bank before accepting the settlement in case the amount to be settled exceed a specified
percentage of the total limit of the credit holder
 There should be system of prompt reporting by the merchant of all settlement accepted by them through
credit cards
 Reimbursement to merchants should be made only after verification of the validity of merchant
acceptance of card
 All the reimbursement should be made immediately charged to the customers account.
 There should be a system to ensure that statements are sent regularly and promptly to the customers
 There should be a system to monitor and follow up customer payment
 Items overdue beyond a reasonable period should identification and attended to carefully. Credit should
be stopped by informing the merchant through periodic bulletin, as early as possibly to avoid increased
 There should be a system of periodic review of credit card holder account. On the basis, the limit of
customer may be revised; it necessary, the review should also includes determination of doubtful amount
and the provisioning in respect thereof.


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.

b) The auditor should also acquire knowledge of the economic environment in which the bank operates.
Similarly, the auditor needs to acquire good working knowledge of the services offered by the bank. In
acquiring such knowledge, the auditor needs to be aware of the many variation in the basic deposit, loan and
treasury services that are offered and continue to be developed by banks in response to market conditions. To do
so, the auditor needs to understand the nature of services rendered through instruments such as letters of credit,
acceptances, forward contracts and other similar instruments.

c) The auditor should also obtain and understanding of the nature of books and records maintained and the
terminology used by the bank to describe various types of transaction and operations. In case of joint auditors, it
would be preferable that the auditor also obtains a general understanding of the books and records, etc. relating
to the work of the other auditors, In addition to the above, the auditor should undertake the following:

1. Obtaining internal audit reports, inspection reports, inspection reports and concurrent audit reports
pertaining to the bank/branch.
2. Obtaining the latest report of revenue or income and expenditure audits, where available.
3. In the case of branch auditors, obtaining the report given by the outgoing branch manager to the
incoming branch in the case of change in incumbent at the branch during the year under audit, to the
extent the same is relevant for the audit.

d) RBI has introduced and offsite surveillance system for commercial banks on various aspects of operations
including solvency, liquidity, asset quality, earnings, performance, insider trading etc., and has indicated that
such reports shall be submitted at periodic intervals from the year commencing 1-04-1995. It will be appropriate
to be familiar with the reports submitted and to review them to the event that they are relevant for the purpose of

e) In a computerized environment the audit procedure may have to appropriately tuned to the circumstances,
particularly as the books are not authenticated as in manually maintained accounts and the auditor may not have
his in-house computer facility to taste the software programmes. The emphasis would have to be laid on internal
control procedure related to inputs, security in the matter of access to EDP system, use of codes, passwords,
data inputs being prepared by person independent of key operators and other build-in procedure for data
validation and system controls as to ensure completeness and correctness of the transaction keyed in. system
documentation of the software may be obtained and examined.

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.

2) Evaluation of internal control system:

It may be noted that transaction in banks are voluminous and repetitive, and fall into limited categories/heads of
account. It may, therefore, be 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.

Internal accounting controls are also envisaging such procedures as would determine responsibility and fix
accountability with regard to safeguarding of the assets of the bank. It would not be out of place of mention that
there is a distinction between accounting system and internal accounting controls. Accounting system envisages
the processing of the transaction and events, their recognition, and appropriate recording. Internal controls are
techniques, method and procedures so designed and usually built into systems, as would enable prevention as
well as detection of errors, omissions or irregularities in the process of execution and recording of

The internal accounting controls as would ensure prevention of errors omissions and irregularities would
include following:

 No transaction can be registered/recorded unless it is sanctioned/approved by the designated authority.

 Built-in dual control/supervisory procedures ensure that there is an independent automatic check on
 No single person has authority to initiate transaction and record through all stages to the general ledger.
Each day transactions are accurately and promptly recorded, and the control and subsidiary records are
kept balanced through personnel independent of each other.

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:

 Missing/loss of security paper, stationery forms

 Accumulation of transactions/balances in nominal heads of accounts like suspense, sundries, inter-
branch accounts, or other nominal head of accounts particularly if there accounts particularly if these
accounts are extensively used to balance books, despite availability of information.
 Accumulation of old/large unexplained/unsubstantiated entries in accounts with Reserve Bank of India
and other banks and institutions.
 Transaction book adjustments not represented by mere non-honoring of evidenced/substantiated or upon
 Origination debits I head office accounts/inter-branch accounts
 Analytical review procedure.
 Serious irregularities pointer out in internal audit/inspection/special audit
 Complaints/matters pending in the vigilance/grievances cell, as regards discrepancies in accounts of
constituents, etc.
 Results of periodic analytical review, if observed as adverse.

a) 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 generally responsible for administrative and policy
decisions which are executed at the branch level.

3) Preparation of audit programme for substantive testing and its execution:-

Having familiarized him the requirements of audit, the auditor should prepare an audit programme for
substantive testing which should adequately cover the scope of his work. In framing the audit programme, due
weightage should be given by the auditor to areas where, in his view, there are weaknesses in the internal
controls. The audit programme for the statutory auditors would be different from that of the branch auditor. At
the branch level, basic banking operation are to be covered by the audit. On the other hand, the statutory
auditors at the head office (provisions for gratuity, inter- office accounts, etc.). The scope of the work of the
statutory auditors would also involve dealing with various accounting aspects and disclosure requirements
arising out of the branch returns.
4) Preparation and submission of audit report:-

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 unambiguous
terms. As far as possible, the financial impact of all qualification or adverse comments on the branch accounts
should be clearly brought out in the branch audit report. It would assist the statutory auditors if a standard
pattern of reporting, say, head wise, commencing with assets, then liabilities and thereafter items related to
income and expenditure, is followed. In preparing the audit report, the auditor should keep in mind the concept
of materiality. Thus, items which do not materially affect the view presented by the financial statements may be
ignored. However, in the judgement of the auditor, an item though not material, is contrary to accounting
principles or any pronouncements of the Institute of Chartered Accountants of India or in such as would require
a review of the relevant procedure, it would be appropriate for him to draw the attention of the management to
this aspect in his long form audit report. In all cases, matters covering the statutory responsibilities of the auditor
should be dealt with in the main report. The LFAR should be used to further elaborate matters contained in the
main report and as substitute thereof. Similarly while framing his main report, the auditor should consider,
wherever practicable, the significance of various comments in his LFAR, where any of the comments made by
the auditor therein is adverse, he should consider whether qualification in his main report is necessary by using
his discretion on the facts and circumstances of each case. In may be emphasized that the main report should be
self-contained document.


A banking company is required to maintain the books of accounts in accordance with sec.209 of the companies
act. There are, however, certain imperatives in banking business they are the requirements to maintain accurate
and always up to date account. Banks, therefore, device their accounting system to suit these requirements. The
main characteristics of a banks system of book keeping are as follows:

entries in the personal ledgers are made directly from vouchers instead of being posted from the books of prime

A. The vouchers entered into different personal ledgers each day are summarized on summery sheet; the
totals of each are posted to the control accounts in the general ledger.
B. The general ledger trail balance is extracted and agreed every Day.
C. All entries in the detail personal ledgers and the summary sheet are check by person other than those
who have made the entries, with the general results that most clerical mistakes are detected before
another day begins.
D. A trial balance of the detailed personal ledgers is prepared periodically, usually every two weeks, and
agreed with the general ledger control accounts.
E. Expecting for cash transactions, always two vouchers are prepared for each transaction, one for debit
and the other for credit. This system ensures double entry at the basic level and obviates the possibility
of errors in posting.


 General ledger:

It contains control accounts of all personal ledgers, the profit and loss account and different assets and liabilities
accounts. There are certain additional accounts known as contra accounts, which is unique feature of bank
accounting. These contra accounts are maintained with a view to keeping control over transactions, which have
no direct effect on the banks positions

For e.g. letter of credit opened, bills received for collection, guarantee is given etc.

 Profit and Loss ledgers:

Some banks keep one account for profit and loss in this general ledger and maintained separate books for the
detailed accounts. These are columnar books having separate columns for each revenue receipt and expense
head Other banks keep separate books for debits and credits posted are entered in to the profit and loss account
in the general ledger.


 Personal ledgers:-

Separate ledgers are maintained by banks for different types of accounts, i.e. current account, saving account,
etc. As has been maintained earlier, these ledgers are posted directly from vouchers and the entire voucher
entered in each ledger in a day are summarized in to Voucher Summary Sheets.

 Bill Registers:

Details of different types of bills are kept in separate registers, which have suitable columns. For e.g. bill
purchased, inward bill for collection outward bills for collection etc are entered serially day to day in separate
registers. Entries in these registers are made by reference to the original documents.

 Other subsidiary registers:

There are different registers for various types of transaction. Their number volume and details, which differ
according to the individual needs of each bank. For example, there will be registers for:

A. Demand drafts, telegraphic and mail transfers issued on branches or Agencies.

B. Demand drafts, telegraphic and mail transfers received from branches and agencies.

C. Letters of credit.

D. Letter of guarantee.

 Departmental journals

Each department of bank maintains a journal to note the transfer entries passed by it. These journals are
memoranda book only, as all the entries made there are also made in the daybook, through voucher summary
sheets. The purpose is to maintain a record of all transfer entries originated by each department.

 Other memoranda books:

 Besides the book mentioned above, various departments of a bank have to mention a number of
memoranda books to facilitate their work. Some of the important books are described below:
》Receiving cashiers cash book

》Paying cashiers cash book

》Main cash book

》Cash balance book

The main cashbook is maintained by a person other than cashier. Each cashier keeps a separate cashbook. When
cash is received, it is accompanied by pay-in-slips or other similar documents. The cashier makes entry in his
book, which is check by the chief cashier.

 Outward clearings:

A person checks the vouchers and list with the clearing cheques received books. The voucher are then sent to
appropriate departments, where customers account are immediately credited. Normally no drawings are allowed
against clearing cheques deposited the same day but exceptions are often made by the manager in the case of
established customer.

 Inward clearing:

Cheques received are check with the accompanying list. These are then distributed to differed department and
number of cheques given to each department is noted in a memo book. When the cheques are passed and posted
in to ledger, there number is independently agreed with the memo book. If the cheques are found unpayable,
they are return to clearing house.

 Loans and overdrafts departments:

a) Registers for shares and other securities held on behalf of its customer.

b) Summary books of securities give in details of government securities.

c) Godown registers maintained by the Godown keepers of bank.

d) Overdraft sanction register.

e) Drawing power book.

f) Delivery order books.

g)Storage books.

 Deposit department:

a) Account opening and closing registers.

b) Fixed deposits rate register.
c) Due date dairy.
d) Specimen signature book.

 Establishment department

a) Salary and allied registers

b) Register of fixed assets
c) Stationary registers
d) Old record registers

 General:

a) Signature books of bank officers

b) Private telegraphic code and ciphers

 Statically books:

Statically records kept by different books are in accordance with their individual needs. For example,
there may be books for recording:

a) Average balances in loans etc.

b) Deposits received and amounts paid out each month in the various departments
c) Number of cheques paid.

d) Number of cheques, bills and other items collected.

 Incomplete records:

In some situations, the auditor may find that certain accounting and other records are not up to date. In such a
situations, the auditor should first ascertain the extent of arrears in housekeeping and the areas in which
accounting and other records are not up to date. It may also be noted that in Long Form Audit Report (LFARO),
the auditor has to make detailed observation on such arrears.


CapitaLand Liabilities

1) Capital:-

The following particulars have to be given in respect of share capital balance sheet For nationalized banks

The capital owned by central government as on the date of balance sheet including contribution from
government, if any, for participation in world bank project should be shown. For banks incorporated outside
India Capital (the amount brought in by banks by way of start-up capital as prescribed by RBI shown under this
head) Amount of deposit kept with RBI under section 11(2) of the banking regulation act, 1949

 For other banks

Authorized capital (shares of Rs......each)

Issued capital (-do-)

Subscribed capital (-do-)

Called-up capital (-do-)

Less: calls unpaid

Add: forfeited shares

The auditor should verify the opening balance of capital with reference to the audited balance sheet of the
previous year. In case there has been increase in capital during the year, the auditor should examine the relevant
documents supporting the increase. For example, in case of an increase an authorized capital of a banking
company, the auditor should examine the special resolution of shareholders and the memorandum of
association. An increase in subscribed and paid-up capital of a banking company, on the other hand, should be
verified with reference to prospectus/ other offer document, reports received from registers to the issue, bank
statement, etc.

2) Reserves and surplus:

The following are required to be disclosed in the balance sheet under the head 'Reserves and Surplus

a) Statutory reserves

b) Capital reserves.

c) Share premium.

d) Revenue and other reserves

e) Balance in profit and loss account.

The auditor should verify the opening balances of various reserves with reference to the audited balance sheet of
the previous year. Addition to or deductions from reserves should also be verified in the usual manner, e.g. with
reference to board resolution. In the case of statutory reserves and share premium, compliance with legal
requirements should also be examined. Thus, the auditor should specifically examine whether the requirements
of governing legislation regarding transfer of the prescribed percentage of profits to reserve fund have been
complied with. In case the bank has been granted exemption form such transfer, the auditor should examine the
relevant documents granting such exemption. Similarly, should be examined whether the appropriations from
share premium account conform to the legal requirements.
3) Deposits:

Deposits are required to be classified in the balance sheet under the following heads.

A. I. Demand Deposits

(i) From banks

(ii)From others

II. Saving Bank Deposits

IV. Term Deposits

(i)From banks.

(ii) From Others.

B. I. Deposits of Branches in India.

II Deposits of Branches outside India.

The auditor may verify types of deposits in the following manner.

I. Current account:

The auditor should verify the balances in individual accounts on a sampling basis. He should also examine
whether the balances as per subsidiary ledgers tally with the related control accounts in the general ledger.

The auditor should consider the debit balances in current account are not netted out on the liabilities side but
appropriately included under the 'advances'.

Inoperative accounts are a common area of frauds in banks. While examining current account, the auditor
should specifically cover in his sample some of the inoperative account revived during the year. The auditor
should ascertain whether inoperative are 'revived' only with proper authority. For this purpose, the auditor
should identify cases where there has been a significant reduction in balances compared to the previous year and
examine the authorization for withdrawals.
II.Saving bank deposits:

The auditor should verify the balances is individual account on a sampling basis. He should also examine
whether the balances as per subsidiary ledgers tally wit the related control accounts in the general ledger.

The auditor should also check the calculations of interest on a sampling basis. It is not usual for branches to
interest saving bank up to a date close to the end of the accounting period for e.g.25th March based on the actual
balances with interest of the remaining period on an estimated basis at the head office level.

III. Term deposits:-

Term deposits are deposits repayable after a specified period. They are considered time liabilities of the bank

The auditor should verify the depos it’s with reference to the relevant registers. The auditor should also
examine, on a sampling basis, the registers with the counter-foils of the receipts issued and with the discharged
receipts returned to the bank.

IV.Deposits designated in foreign currencies:

In the case of deposits designated in a foreign currency, for e.g. foreign currency non-resident deposits, the
auditor should examine whether they have been converted into Indian rupees at the rate notified in his behalf by
the head office.

V. Interest accrued but not due:

The auditor should examine that interest accrued but not due on deposits is not included under the deposited but
is shown under the head 'other liabilities ad provision.
2) Borrowing:

Borrowings of a bank are required to be shown in balance sheet as follows:

I. Borrowing in India.

a. Reserve Bank of India

b. Other banks.

c. Other institution and agencies.

II. Borrowing from RBI, other banks/financial institution etc. should be verified by the auditors with reference
to confirmation certificated and other supporting document such as agreements, correspondence etc.

The auditor should also examine whether a clear distinction has been made between 'rediscount and 'refinance'
for disclosure of the amount under the above head since rediscount does not figure under this head The auditor
should examine whether borrowing of money at call and short notice is properly authorized. The rate of interest
paid/payable on as well as duration of, such borrowing should also be examined by the auditor.

Other current liabilities:

The third schedule to the banking Regulation act, 1949, requires disclosure of the following items under the
head 'other liabilities and provision

 Bills payable
 Inter office adjustments
 Interest accrued
 Other (including provisions)

The auditor may verify the various items under the head other liabilities and provision in the following manner.

 Bills payable
Bills payable represent instrument issued by the ranch against money received from customers, which are to be
paid to the customers or as per his order. These include Demand Draft, Telegraphic Transfer, and Mail transfer
and Mail Transfer, Traveller cheques, Pay order, Banker cheques, and similar instrument issued by the bank but
not presented for payment until the balance sheet date.

Inter office adjustment:

The balanced in inter office adjustment account, if in credit, is to be shown under this head.

Interest accrued:-

Interest accrued but not due on deposit is to be shown and borrowing is to shown under this head. The auditor
should examine this with reference to terms of various type of deposits and borrowings. It should be specially
examined that such interest has not been clubbed with the deposits and borrowing shown under the deposits and


According to the notes and instructions for compilation of balance sheet and profit and loss account, issued by
the Reserve Bank of India, the following items are to be included under this head

 Net provision for income tax and other taxes like interest tax, less advances payment and tax deducted at
 Surplus in aggregate in provision for bad and doubtful debts provision account.
 Contingency funds, which are actually in the nature of reserved but are not disclosed as such.
 Provision towards standard assets. These are to shown separately contingent standard assets.
 Proposed dividend/transfer to government.

Cash, bank balanced and money at call and short notice

The third schedule to the Banking Regulation act, 1949, requires following disclosure to the be made in the
made in the balance sheet regarding cash balances with Reserve Bank of India., balance with other bank, and
money at call and short notice.

Cash and balance with Reserve Bank of India.

I. Cash in hand (including foreign currency notes)

II. Balance with Reserve Bank of India

a) In current account

b) In other account


The auditor should verify the investment scripts physically at the close of business on the date of balance sheet.
In exceptional cases where physical verification of investment scripts on the balance sheet date is not possible
the auditor should carry out the physical verification on a should take in to consideration any adjustment for
subsequent transaction of purchase, sale etc. he should take particular care to see that only genuine investment
are produced before him.

4) Fixed assets:

In carrying out an audit of fixed assets, the auditor is concerned primarily with obtaining evidence about their
existence and valuation The branch auditor should ascertain whether the accounts in respect of premises and/or
other fixed assets are maintained at the branch or centrally Similarly, he should ascertain the location of
documents of title or other documents evidencing ownership of various items of fixed assets. The auditor should
verify the opening balance of premises with reference schedule of fixed assets, ledger or fixed asset register

In respect of fixed assets sold during the year, a copy of the sale deed and receipt of the salve value should
examined by the auditor.

Other assets:

The auditor should see that whether there are any reversals entries indicating the possibility of irregular
payments or frauds in case of inter- office adjustments. The auditor should also pay attention towards interest-
accrued part from the banks point of view. The auditor should see that internal control over stationery items.
The auditor should verify the stationery and stamps. The auditor should examine the non-interest bearing
advances to the staff with reference to the relevant documentation. The auditor should also see that the entries
under the head 'suspense account'. The auditor should also verify prepaid expenses in the same manner as in the
case of entities.




o Many banks instead of having concurrent audit or even in addition to having concurrent audits may use
‘internal auditing’.
o Internal Auditing is when any organization, including a bank, constitutes an audit team within its own
organization to cater to its auditing requirements.
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.


o ‘Statutory Audit’ is conducted by a ‘Statutory Auditor’ – the word ‘statute’ means – mandated or
compulsorily required by any law or Act; in Bank’s case it is the RBI’s mandate.
o Every year around the very last days of March (end of financial year) and the beginning of April (first
two weeks of April) – in every branch of every bank a very rigorous activity is held – know as the year
end audit or the statutory audit!
o This audit is the most important event for a bank as this decides among other things – the NPA!
o Which by now, I think most of you would know and appreciate how important it is for any bank – NPA
and its provisioning affect the profits of a bank and hence the Balance Sheet and Profit and Loss Account
and finally the shareholder’s dividends.
o Thus Statutory Audit is very important.
o Statutory Auditors are appointed by RBI in association with the ICAI, to empanel Chartered Accountants
for the job.
o Statutory Audit does not look at the nitty-gritties of the banking transactions (these are looked at by
concurrent and internal audits); instead they rely on the concurrent audit reports and test checking to
form their opinion.
This is annual audit determined by status and done normally at the end of the financial year while some
of the lager branches are similarly audited half yearly. A bank statutory audit is essentially a balance
sheet audit including the long audit report though there is no scope restriction of the statutory auditor to
perform certain actions of the other auditor as part of his duty or if some findings lead him into the
domain the auditors such as revenue, inspector and even concurrent .

The statutory audit, which is compulsory as per the law. The statutory audit of banks includes examination and
inspection of internal audit, concurrent audit, etc. The statutory audit of banks is like a post mortem activity.
The suggestions of the statutory auditors can assist the bank management in improving the effectiveness of
internal audit/concurrent audit/inspection functions, etc. In this way statutory plays a very important role in
regulating the banking companies.

In today's 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. System audit s the audit of such computer environment/system and comprises the
following internal controls over EDP activities and with application controls specific control procedures over
accounting applications/assuring that all transaction are recorded and authorized and completely, accurately,
timely processed manner which in turn are verified by computer.


o Concurrent Audit means – the audit or examination of transactions happening as and when a transaction
actually happens.
o It is a continuous audit, which goes on all the year around, usually conducted by external auditors
(Chartered Accountants) on monthly basis.
o In concurrent audits daily basis transactions are examined and checked – this ensures any irregularities
are nipped at the bud.
o Banks have a huge number of daily transactions – they also have many documentations and other
formalities that they have to conform too – through concurrent audit any irregularities or nonconformities
are easily found out as and when it happens and rectified immediately; this avoids piling up of
irregularities which may become a huge problem for any branch when the year end audit comes around!
o Concurrent Auditors check for daily maximum cash balance adherence compliance, KYC norm
compliance, proper documentation of new loan disbursement, checking if new loans have been made as
per rules and regulations, income leakage etc. among other things like putting any new RBI instruction to
work!; these are reported on in the ‘concurrent audit report’.
o Concurrent Audit is a measure to help a Branch to work smoothly and rectify any mistakes to avoid
cascading effect of the irregularities.

Concurrent audit is the system which introduced by the RBI with the view that interval between the occurrence
of transaction and it's 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.

Particulars Statutory audit Concurrent audit

Appointment External auditor is appointed by the share Concurrent auditor is appointed

holders or the government and also by by the management.
management if prescribed in status

Qualification The auditor must process qualification as CA in companies act and income
prescribed by the law. For example CA in tax act.
companies act and income tax act.

Responsibility He is the responsible to the shareholders or the He is responsible to the

government. management.

Period It covers normally one accounting period. Continuous monthly basis

objective To improve the existing system To comment upon reliability of

the financial statements.

Verification Asset and Liability are generally verified only A verification of document of
at a year end . bank customer.


➢ Concurrent Audit is not a -ONE TIME activity.

➢ It is CONTINUOUS process wherein each aspects of banking operations are covered periodically &

➢ The General audit procedures includes of 2 kinds of verification:



➢ Verification of Loan and other related documents.

➢ KYC Norms.

➢ Voucher verification (including income & expenses)

➢ Cash management, Collection & clearing of Cheques.

➢ Checking of Daily reports generated.

➢ Unit inspection, Verification of Stock statements, Audited & Projected Financials of the Borrowers.

Application of Interest (received/paid) for all the accounts.

➢ verifying the suspicious transactions in all the accounts including Staff accounts.

➢ checking the various compliance functions to be adhered by the Branch such as TDS & Service tax
(Remittances & Returns), Monthly & Quarterly returns & Certificates submitted to the Controlling office, etc.,

Physical verification of Sensitive items such as Cheque books, blank DDs & Term deposit Forms, Jewels, etc.

➢ Collection of Data regarding Loans accounts for the purpose of creating a DATABASE.


➢ Analysis of Various reports generated by us from the CBS regarding areas such as

❖ Irregular/Overdue Loans, TOD/Excess allowed, NPA & Watch category accounts, Interest deviation, Day
end reports, VVR, Cash Transactions, BS & PL, etc.,

➢ Reporting of Key deficiencies identified.

➢ Identification of Accounts & Transactions that are subjected to further verification (verification can be done
either ON-SITE or OFF-SITE.)

➢ Creation and Updating the DATABASE for Loan accounts and scrutinizing it periodically.

I had visit the “Yogesh tanpure Associates, Chartered Accountants” The internship Project “A Study On Audit
Procedure of To Rajgurunagar Sahakari Bank LTD.” Related to the CA Firm. I was meet to Mr. Yogesh

& Mrs. Samiksha Tanpure. and they said to me to join the firm for this project and provided some files
regarding my internship project topic.

1. After going to the Bank, the manager made the introduction of all the staff at the firm.
2. Let me the first inform about the work on the Bank and some suggestion have given to me.
3. I helped the staff there for a lot of work.
4. I visit to “Rajgurunagar Sahakari Bank LTD”
5. I checked the some files such as file of receipts.
6. I searched the various information about Audit Procedure.
7. To handle cash maintenance Book.
8. To do Physic Verification of cash.
9. To verify Stock of cheque book, fixed deposits. And issued deposit receipts
10. To do the KYC
• ID proof and address proof of the customer along with photograph
• Application form is properly filled on or not?
• Signature and seal of bank officials?
11. To observe and comment on accounts opening statistics like saving, current, F.D Reinvestment Deposits
12. To verify specimen Signature of customers.
13. To observe and verify details of pending stock statements.
14. To Renew pending cash credit.
15. To Provide remarks on loans/advances given.
Checked the securities hypothecated against loan. And whether loan agreements are with in authority
of bank.
16. To check whether insurance policy renewed or not?
17. To handle locker entry book.
18. To do daily inward and outward.
19. To aware customers by providing customer compliance notice.
20. To verify Cash Ledgers.



H.O.:Sr. No. 319/320 Pune Nashik highway,

Rajgurunagar, Tal-Khed, Dist-Pune-410505.


Concurrent Audit Report for the month of April 2019.

Status of compliance of earlier report: In Process

Observation &suggestion:-


1) Branch Manager:- Kulkarni Padmanabh.

2) Branch Address:- Dharmraj Plaza, Pune Nashik highway, Behind HP Petrol pump Narayangaon, Tal
Junner, Dist Pune 410505.

3)NO. Of staff:- Designation No of staff

1) Branch Manager 1
2) Asst. Branch Manager 1

3) Sr. Officer 1

4) Jr. Officer 5

5) Cashier 1

6) Peon 3

Total 12

4) Previous Internal Concurrent Audit:

Name of the Concurrent Auditors:- Yogesh Tanpure & Associates.

Period Audit Report:- April-2019

Report available up to :- March-2019

5) Financial Position of Branch on 30/04/2019

(Amount in Lakh) Particulars Previous Current Month Difference
1) Deposits 9026.18 9142.99 116.81

2) Loans & Advances 3286.63 3278.86 -7.77

3) Net profit 0 28.07 28.07

Part A- Deposit:-

1) Cash On Hand/ Cash at ATM

a)Physical Verification of cash

Date: 10/06/2019 - Cash in hand Rs. 1,04,14,953/-

a) Verify Cash Balance with cash book-

We physically verified the cash (Excluding Physically verification of Coins) balance on 10th June
2019 and found correct.

Cash At ATM on 10/06/2019 as below- as per 100CSI report- Nil

Soiled Cash: No

b) Cash Maintained by the branch including ATM- Cash within retention limit with the branch, if
not, give details.

Cash retention Limit exceeded by the following amounts

Cash Retention Limit as Actual Cash Cash Retention limit Date of Cash
per H.O. Balance exceeded by Rs. Retention limit

75,00,000/- 98,59,592 23,59,592 02/04/2019

75,00,000/- 99,37,450 24,37,450 03/04/2019

75,00,000/- 82,99,154 7,99,154 12/04/2019

75,00,000/- 80,68,967 5,68,967 15//04/2019

75,00,000/- 79,74,290 4,74,290 25/04/2019

c) Excess Cash: NA

d) Checking Tokens- Verified & properly maintained

e) Total Tokens- 100 Available

In custody- 50 Tokans

Available - 49 Tokans

Missing - 01 Tokan (tokan no 37)

2) Stamps on Hand- Nil

3) Security Printing Stock
We verify the stock of Cheque book, fixed deposits receipts which is in bank custody on date- 10th
June 2019.
Stock as follows.
1. As per information given by the Branch Manager, Cheque books are issued from H.O.
2. Deposits Receipts: Book No1188 to 1191 and 1197 to 1200.
Receipt in use book no 1187- 118693 to 1187000.
4) Comment on quarterly Targets of Deposits:-
(Rs. In CR)
Quarter (F Y) Targets of Deposits Actual Deposits as on Comment
Q1 91.42




Observation and comments on accounts opening statistics &KYC Norms:-

a) Saving Accounts: Opening from 23/12196 to 23/12211
Account NO. KYC incomplete Remarks

23/12205 Account open without Pan card copy or From 60/61

b) Currents Accounts: Opening From 21/1784 to 21/1787

Accounts No. KYC incomplete Remarks

c) Fixed Deposit: New/renew A/c-05

Account No. KYC incomplete Remarks
d) Reinvestment Deposits:
Account No. KYC incomplete Remarks

e) Gangotri Fixed deposits:-

Account No. KYC incomplete Remarks

f) Monthly Fixed Deposits:-

Account No. KYC incomplete Remarks

g) Recurring Deposits:- Total 01 a/c open:-

Account No. KYC incomplete Remarks

h) Cash Credit Against Deposits: Total 0 A/c open

Account No. KYC incomplete Remarks

Verification of specimen Signature

We verified specimen signature scanned in the system on sample basis on 10th June 2019.
Account No. Account Type Name

21/1784 Current Abhinandan Collection

21/1786 Current Manoj Kiran Store

23/12196 Saving Pate Manisha Sachin

23/12211 Saving Badhe Vipul Jaysingh

Part B- Advances

1) Comment on Quarterly Targets of Advances:-

( Rs. In Cr.)
Actual Advances as
Quarter Targets of Advance on 30//04/2019 Comment





2) Cash Credit / overdraft pending for Renewal:-

Following Cash Credit accounts are pending for renewal as on 30/04/2019.

Sr No Name Expiry date

1 Yash Tractors 30/04/2019

3) Stock Statement –
Sr.No. Account Number Pending Month
151/10, 151/30, 151/40, 151/72, 151/235,
151/248, 151/261, 151/265, 151/269,
151/277, 151/308, 151/327, 151/373,
151/374, 151/383, 151/386, 151/401,
151/407, 151/409, 151/411, 151/413, April 2019.
151/416, 151/417, 151/420, 151/421.

4) Observation & Remarks on Loans/Advances Given:

Account No. Customer Name Remarks

 Vehicle registration
172/770 Swati Satish Bhor document and
(60K) insurance policy
document not available
for verification.
 Vehicle inspection
report or visit note with
photo not on record.
 Vehicle inspection
172/769 Sanket Sunil Varhadi report or visit note with
(50k) photo not on record.
 Stock statement not
171/956 Deepa Kiran Mane matched with Balance
(1 lakh) sheet.
 Income Tax return
copies not available

 Mortage deed register

172/92 Bhalerao Jaashree as on 16/04/2019 but on
Pravin deed date wrongly
(13 lakh) mentioned is
 Loan Updated 7/12
should be taken on

5) Vehicle Loan Document Incomplete:-

RCTC Book, Tax receipts, Stamp receipt, Fitness certificate, Pollution Certification,
Insurance Policy, Road permit, Duplicate key not obtained on record some name is as follows:-

Account No. Remark

- -

- -

- -

6) Verification of Gold Bags:

We verified some gold bags and found correct as per register.
This case no. is as follows.
Account No. Remark

153/2097 Verify and found correct

153/2184 Verify and found correct

154/10693 Verify and found correct

154/11025 Verify and found correct

7) Insurance Policy:
Insurance policy not received or renew for the followings-
Account No. Expiry Date Renewal Date

171/904 15/04/2019 13/05/2019

171/909 15/04/2019 Not renew

171/921 17/04/2019 13/05/2019

171/923 17/04/2019 13/05/2019

151/261 17/04/2019 Not renew

171/922 17/04/2019 Not renew

151/402 17/04/2019 12/05/2019

Remarks- Insurance Policy not renew within time.

Part C General

1) Head office account reconciliation date: 30/04/2019

Sr. No. Particulars Remarks

1 Head Office Account Reconciliation Head Office

Statement Reconciliation statement

2 Other Bank account Statement N.A

3 Comment of long Pending Entries (If

4 ATM Transaction Reconciliaion

2) Long Pending entries if any-

a) Shares suspense account:

There is share suspense account of Rs. 2,100/- as on 30/04/2019

Some accounts are as follows:-

Account No. Remark Rs.

240/620 Jeevan Electricals 1050/-

240/621 Ghodekar Sandip Dadabhau 1050/-

b) Other Payable

Total Rs. 53,064/- Old account should be settled as earlier Some A/C os as follows.

Account No. Remark

248/114 Mahajan Amrut Sadashiv

248/320 Varhadi Pharma Agency

248/323 Bhor Swati Santosh

c) Entrance Fees Payable- Rs. 800/-

3) Lockers:-
a) Total No. Lockers in the branch of which empty No’s

Total No. of Locker Occupied Locker Empty Lockers

162 160 2 Use For Branch

4) Bank House Keeping:-

Sr.No. Particulars Remarks

1) Submission of prescribed returns to Available

Head Office
2) Maintenance of register

a. Muster Register Biometric System

available at branch

b. Safe and key & Charge Register Verified

c. Token Register Required to update daily


d. Daily cash Balance at branch Verified & Properly

Maintained .

e. Cash in transit Register Verified & Properly

Maintained .

f. Nominal Member Register Verified & Properly

Maintained .

g. Stop Payment Register Verified & Properly

Maintained .

h. Cheque Book issue Register Verified & Properly


i. Cheque Return Register Verified & Properly


j. D.D issue Register Verified on the base

information available on

k. Outward Clearing Register Verified & Properly


l. OBC Register N.A

m. IBC Register N.A

n. Insurance Due Date Register Verified & Properly


o. Dead Stock Register Verified.

5) Customer Service:
Customer Compliance (with reference to complaints Register)-
Suggestion Box is available at Branch.
Complaint Register available at branch.

6) Verification & cash – Book/ GL/subsidiaries/Ledgers:

Sr.No Particulars Remarks

1 Entries are properly checked and authenticated Yes

2 Whether main day book signed by branch Yes

3 Abnormal Transaction in staff Accounts No

7) Comments on other Working:-

Sr.No. Particulars Remarks

1 Computer maintenance and operation Fair

2 Dead Stock Verification Yes

3 Muster/Leave Record Verification Yes

4 General and battery Maintenance Yes

5 Security Guard Yes

General Remarks/Observations

1) Original Documents should be verify by authorized Person.

2) Branch should take insurance policies from all loan borrowers every year up to loan period.

I am thankful to the branch manager & the staff members of the branch for the cooperation during the
course of Audit.

 First think learn about this project is Debit balance in saving account must be examined in detail and
accounts outstanding more than 90 days should be provided for reported to the concern authority.

 Second part of the learn from unusual trends in account opening and account closing, Dormant account
that have been reactivated after by withdrawal of heavy cash and examine ask to the customer why it’s
happens so and properly reported concern authority.

 Researcher is able to identify the difference between statutory audit and concurrent audit.

 Researcher had learnt how to operate software's like Tally & Excel and MS Word which plays an
important role in audit and how each of them is applicable for different sectors.

 I Learned through my training programs, that how I can

1) Improve communication skills.

2) Analyze the bank situation.
3) Learn more than the theoretical knowledge.
4) Make quick decision in real situation.
5) Tally.

 The Bank maintains proper records of the transaction. All transaction was verified and were supported
by proper documentary evidence.
 The Bank also maintains proper record of cash vouchers. In the audit process, some clerical error which
were found such error of omission, debiting expenses to a wrong accounts head, entry of wrong amount
while recording transaction etc. were brought to the notice of concerned person and rectify.


 The Bank audit procedure is very lengthy and time consuming; therefore only one Bank was taken up for
auditing the study period of two months.
 The data was large in quantity that’s why is not possible to cover vouching during auditing.
 New techniques and technologies are used in the work of accounting. Such technology creates the
problem in the work of audit but such problems and remedial measures are not included in the audit

My Summer Internship Project helps me to understand vouching and auditing procedure. The project the
position of Indian banking system as well as the principal laid 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.
form this auditor get the clear ideas how to recommend on the banks position. 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
today's scenario form company and point of view.


1. Advanced Auditing and Professional Ethics Vol. 1

Published by Board of studies, Institute of Chartered Accountants of India
2. On Bank Branch Audit- CA P.R.Suresh
3. A Practical Guide For Bank Auditors- CA Anil K. Sexena.
4. Tally ERP 9 Auditors




1. ICAI Practice Manual

2. Compliance Audit Report
3. Rajgurunagar sahakari bank ltd. Handbook