1. Summary
  2. Types of Bank Audit


The plan auditing is completely under International Standards on Auditing (ISA) similar to different native auditing standards. Operational audit involves checking the potency of routine operations of the bank, assessment of the dependability and accuracy of the money records and reports, implementation of policies and procedures, and guaranteeing its effectiveness. Let us see the various forms of Bank Audit

Types of Bank Audit

Forensic Audit: A rhetorical audit is an examination of a company’s money records to derive proof that may be utilized in a court of law or procedure. The rhetorical auditor’s report might facilitate to nail and prosecute the parties concerned in fraud, thievery, or different varieties of money misappropriations.

  • Legal Audit: The scope of the legal audit by the banks is completely different from the legal audit of different sectors. Tally directs the banks subject to deeds and different documents in respect of all credit exposures of Rs.5 large integer and higher than to periodic legal audit and re-verification of title deeds with relevant authorities as a part of regular audit exercise until the loan stands repaid.
  • Stock Audit: each bank contains a ‘stock audit policy’ beneath that all its branches shall organize a ‘stock audit’ of the accounts that are enjoying assets facilities on the far side bound limits. In line with the stock audit policy of the banks, the external auditors appointed by the bank shall examine assets charged to the bank once or doubly a year as desired by the bank. This can be added to a routine stock examination allotted by the involved branch.
  • Revenue Audit: Revenue audit of bank branches is that the audit of things governing financial gain & expenditure of banks. The audit is conducted with a read to verify the accuracy, connectedness of expenditure incurred & Incomes earned by the banks in line with applicable latest notification and circulars.
  • Concurrent Audit: All scheduled bank branches and concrete co-operative banks with deposits over Rs. 50 large integers were needed to introduce the system of synchronic audit. The audit aims at reducing the gap between the incidence of a dealing and its examination that helps in preventing fraud.
  • Risk-based internal audit: the first focus of risk-based internal audits ought to be to produce cheap assurance to the Board and prime management regarding the adequacy and effectiveness of the change management and management framework within the banks’ operations.
  • Statutory audit: Statutory Audit could be a form of audit allotted by the charted accountants are mandated by a Law or a Statute to confirm the books of accounts conferred to completely different regulators and therefore the public ar true and honest. Such audit is obligatory for sure enough criteria prescribed by the various statutes like depository financial institution of India, Income Tax, corporations Act, 2013, or the other statute governing the organization.
  • Long Form Audit Report (LFAR): the general objective of the Long kind Audit Report (LFAR) is to spot and assess the gaps and vulnerable areas within the business. the realm of LFAR mandated to hide areas of ‘Credit risk’, ‘market risk’, assurance functions and operational risk areas’, ‘capital adequacy, and ‘going involved and liquidity risk assessment’, among others.
  • Credit Audit: we’d have encountered various instances of parties’ fancy varied varieties of frauds and forgeries to cheat banks and avail finance. Banks will avoid most of such instances by projecting to principles of KYC (Know Your Customer) in letter and spirit. Auditor ought to scrutinize the loan dealing covering the method of sanction, documentation, and operation of the loan account.
  • Investment / Treasury Audit: Banks are needed to follow specific tips issued by tally on the investments to be created by the banks together with the CRR & SLR necessities.
  • Snap Audit: Inbound inevitable things, banks might appoint an auditor for conducting Snap Audit to visualize and verify bound specific aspects inside the bank or branches and report back to the highest management on fixed matters or problems or matters in respect of bound borrowers.
  • IT Audit are much all banks within the country use core banking solutions that cowl most of their branches across the country and therefore the majority of the banks use ERP systems. The system Auditors assess and check the data security structure, and integrity of the system so that the output that the system produces is reliable. CA companies are well matched to hold out System Audits.
  • Compliance Audit are within the banking sector there are several forms of laws to be followed by the bankers and befits. As per tally directions, industrial Banks are needed to line up the grievance review (assessment) or compliance audit to form positive that they’re compliant with those laws and laws set. The bank might assign its internal audit to perform to review whether or not the entity’s internal policies and procedures are compliant and effectively follow.
  • RBI examination of bank branches: The Banking Regulation Act, 1949 empowers the depository financial institution of India to examine and supervise industrial banks. the first objective of the off-site police investigation is to watch the money health of banks between 2 on-site inspections, distinctive banks that show money deterioration and would be a supply for superior considerations. This acts as a trigger for timely remedial action.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

View All Articles