Build your professional network on facebook via our app Go to app
 
<< Prev  7 of 10 in Topic  Next >>
 

Audit of bank accounts - Is it perfunctory or worthy of its salt?

Created by : Muthusundaram , Branch Manager, Bank of Baroda  | 03 27 2010 16:58:08 +0000
Industry : BankingFunctional Area : India(Markets)
Keywords : audit of banks
Activity:  239 views;  last activity : 07 06 2010 20:18:09 +0000

The bankers are already half auditors coupled with latest technology in accounting solutions.  Hence mere verification of accuracy of accounting or perfunctory commenting is no longer required.  So, is the Annual audit a mere ritual or is it required for ensuring a sound banking?

  
 Refer 702
Share
 
 
  Rate : 
 
 
Auditing should be on international standards Vs Auditing should be as at present
11
 
 
 
 
4
7
2
Support   Support
Top Argument
2
0

Muthusundaram I support you, it would be better if our banks follow the international standard. The reason being every sector in India is going global and many international companies are entering India, so I feel it would be more beneficial if we follow a international standard. 

Thanks...  
By Rashmi Chawla, Cust. Service Manager, Leading Bank  03 29 2010 09:16:12 +0000
 
Top Argument
4
0

Both the auditing standards, Indian as well as International Accounting standards have compliment each other. The problem is not the option of standard of auditing but the methods adopted by the Auditors themselves.

I worked for more than 12 years in Finance department of International Bank in Saudi Arabia, Bermuda, India and Dubai. There is always a window dressing done prior to the closing of the banks. The adjustment is always done in " Adjustment account, accrual account and loan loss and operational loss provisions.

Most of the financial audititors conduct only the reconciliation of accounts and reconciliation of balances with the source. In most cases, when the profit is in excess of forecast/guidance, either provision is made or write back to the Profit.

IAS 39, IFRS as well as Indian audit standards are all the same but the application of these standards are most of the times flouted by the auditing firm at partners level in connivance with the Boards or CEO of the Bank.

CEO of Lehman Bros few days before the bankruptcy petition claimed that the financial of the bank is sound and he quoted the interim auditors' statement. Same as the case for ENROL, Worldtel. In 2010, 32 banks in USA were closed due to non compliance with the prudential norms.

Therefore, I am of the opinion that standards are fine but the application by the Auditing firms need to be closely monitored.

I suggest that one of the best way to monitor the auditors work is audit by Central Bank based on exceptions, though it sometimes is difficult
By NAGARAJAN B, Freelancer, Freelancer  03 29 2010 15:08:55 +0000
0
0

At the advent of global becoming a village the Auditing also should follow an International Standard.
By deepan , Sr.Research Analyst, Beroe  | 03 30 2010 13:28:00 +0000
0
0

Yeah the the banks need to follow the standards set up globally but with all caution.

RBI is very competent and transparent frankly Indian banks are at par with every bank procedures in the world.
By rasik upadhye, dyputy manager, idbi fortis  | 03 30 2010 09:44:40 +0000
1
0

It does not matter which standards we follow, all we need is

1. Timely and transparent audit

2. Audit reports published on the banks websites for everyone to see

3. Reply/response to auditors report by the directors of the bank is also posted on the website.
By Prasad PN, Zonal Sales Manager  | 03 29 2010 15:32:41 +0000
1
0

Muthusundaram

Financials can be prepared as per IFRS (International Financial Reporting Standards) but audit can be done only as per what the financials are drafted.Also the listed companies and cos with networth of INR 1000 crores have to mandatorily prepare financials as per IFRS by April 2011.Yes the IFRS will help in easy comparison between 2 similar comapanies in 2 different countries.Also the group financials preparation will be relatively easy as the GAAP will be the same.Companies like ICICI BANK,Tata Motors have started to draft financials as per IFRS.
By Vikas Bhatnagar, Manager Finance, Tata Motors Ltd  | 03 29 2010 13:05:57 +0000
0
0

When the entire paradigm is turning global, it does not make sense to be insular on this point. More importantly, the global audit program is bound to be more robust as it would have factored breaches and infirmities in the banking system in a much larger universe.
By Easwara Narayanan, Director, Greshma Shares and Stocks Limited  | 03 29 2010 10:16:18 +0000
2
0

The banks in any case have to adopt Basel II norms and the accounting should be as per GAAP standards.  Hence auditing also should be of the same standards in parlance with global standards
By Muthusundaram , Branch Manager, Bank of Baroda  | 03 27 2010 16:58:08 +0000
1
0

Dear Muthusundaram

You are yourself a Banker.

Annual Audit in Banks is done by Chartered Accountants / Financial Professionals appointed by respective bank. They see if the policies on the broader scales are being complied by respective banks

Again, internal branch inspection of each branch of the respective bank is done by Bank's Auditors, who are employed by the respective bank. They perform detailed inspection / audit to see the policies as well as  the internal procedures are complied with, which results in controlling the fraudulent activities 

Audit is a complete different issue, no matter, whether the banks follow GAAP or IFRS.

Audit should be the way it is done at present in India, with bit of practical changes, keeping in mind the improved technological aspects

We have seen / are seeing the consequences of international Audit Standards (practiced in US)!!. In fact, they are thinking of adopting Indian Audit Standards !
By Veejay Bhatia, Administration Manager / Recruitment Coordinator, French Firm dealing in Oil & Gas, Dubai (UAE)  | 03 29 2010 13:49:51 +0000
Argue for "Auditing should be on international standards"
Argue for "Auditing should be as at present"
 Found the debate "Audit of bank accounts - Is it perfunctory or worthy of its salt?"  interesting ?  Suggest to your connections and communities  
Leading staffing and human resources consulting firm
Worksource is a full-fledged staffing and human resources consulting firm that is a single point destination for your middle and top management hiring needs. We focus on managerial talent and place professionally qualified executives across levels and functional disciplines. Besides being process......
Viewers also viewed
THE  GENERAL APPREHENSION OF THE CONSUMER IS THAT THE ONLY ASSURED SAVING INCOME WILL BECOME A...
 
0 referals 4 arguments, 189 views
Will Banks really cut jobs or not?
 
0 referals 5 arguments, 254 views
We all know that lot of black money is lying out therein Swiss Banks.. Now our government is on...
 
2068 referals 43 arguments, 1261 views
more...  
Recent Knowledge (5)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 97 views
These days as I switch on the tv or radio or look at a hoarding I do feel that power of ads I...
 
3004 referals 23 arguments, 482 views
C vs B
 
0 referals 3 arguments, 51 views
more...  
Sponsored Jobs
More From Author
Many organisations presume that the customer is aware of all the lines in small print.  But when a customer comes to know of any apparently hidden cost or something like that, he feels cheated.  The organisations can take a shelter under the rule...
The bankers are already half auditors coupled with latest technology in accounting solutions.  Hence mere verification of accuracy of accounting or perfunctory commenting is no longer required.  So, is the Annual audit a mere ritual or is it...
I would say that the various taxes paid by the employees to the Govt. is actually a cost incurred by the company and is paid to the exchequer.  It cannot be classified as a CTC on behalf of the employee. Instead the companies should take the actual...
more...  
  • Popular Knowledge
  •  
  •  
  • Popular Jobs
  •