Bank and Government Audits
Bank Audit :
Statutory Audit is an audit which is prescribed by the different statute like Reserve Bank of India, Income Tax, Companies Act, etc. A Chartered Accountant need to conduct many audits as per the different statute requirement.
Statutory Audit of banks is mandatory. Statutory Auditors are appointed by RBI in association with the ICAI. Every year after the end of the previous financial year, in every branch of the banks, a very rigorous audit is conducted.
Process of conduct :
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Cash Verification Procedure :
The auditors have to verify the cash balance at the branch at the end of 31st March.
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Tax-Related Items :
An auditor will also have to check all the tax-related items and compliances that are applicable to the bank like TDS, 15H & 15H etc.
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Verification of Loan Accounts :
Loan accounts form a major part of the assets for banks. A statutory auditor should check the loan accounts very cautiously.
i. Preliminary Check
ii. Disbursement
iii. Post Disbursement Inspection
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Issuing Audit Reports.
Government Audit :
In India the President appoints the Comptroller and Auditor General of India under Article 149 of the Constitution, which gives the powers and rights and fixes his responsibility for the audit of Government departments and institutions.
Government audit is divided into several branches like Defense, Railways, Posts and Telegraphs audit. It works only for government offices and departments. This department cannot undertake audit of non-government concerns. Its working is strictly according to government rules and regulations.
Needs for Government Audit :
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To make sure that the expenditure is incurred out of the fund, which the competent authority has sanctioned.
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To verify that the expenditure of the government department is sanctioned as per the rules and regulations of the department concerned.
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To see that the expenditure already sanctioned has been incurred by an officer who is authorized to do so.
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To ensure that the payments have been made to the right persons and they are duly entered in the books on the basis of receipts received from them.
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To see that the payments have been properly classified into capital and revenue.
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To check the existence of stock and stores and their proper valuation.
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To ensure that expenditures have been incurred in the interest of public.
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To ensure that stocktaking is done periodically and stock registers are maintained up-to-date.
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To ensure that whether money due from others has been regularly recovered while verifying the receipts.