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Questions and Answers
What is a requirement regarding subcontracting audit work by the firm?
What is a requirement regarding subcontracting audit work by the firm?
What must the firm declare regarding credit facilities?
What must the firm declare regarding credit facilities?
What happens if the declaration by the firm about credit facilities is found incorrect?
What happens if the declaration by the firm about credit facilities is found incorrect?
Under what condition does the tenure of the concurrent auditor automatically terminate?
Under what condition does the tenure of the concurrent auditor automatically terminate?
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Who else can be empanelled in addition to the qualified audit firms?
Who else can be empanelled in addition to the qualified audit firms?
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Which entity's approval is required for Chartered Accountants applying for concurrent auditor positions?
Which entity's approval is required for Chartered Accountants applying for concurrent auditor positions?
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How is the appointment of concurrent auditors for various audit assignments determined?
How is the appointment of concurrent auditors for various audit assignments determined?
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What is the consequence of a complaint against a concurrent auditor?
What is the consequence of a complaint against a concurrent auditor?
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What is the initial tenure of a concurrent audit assignment?
What is the initial tenure of a concurrent audit assignment?
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What factors are considered for the approval of audit firms and retired officials?
What factors are considered for the approval of audit firms and retired officials?
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What is the cooling period for a firm to become eligible for reappointment in the same audit unit?
What is the cooling period for a firm to become eligible for reappointment in the same audit unit?
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What is the maximum number of audit assignments awarded to a single firm at one time?
What is the maximum number of audit assignments awarded to a single firm at one time?
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Which of the following is a requirement for concurrent auditors as per the Companies Act 2013?
Which of the following is a requirement for concurrent auditors as per the Companies Act 2013?
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Which committee is responsible for the approval of the auditor firms?
Which committee is responsible for the approval of the auditor firms?
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What criteria can lead to the extension of the concurrent audit beyond the initial year?
What criteria can lead to the extension of the concurrent audit beyond the initial year?
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Under what condition might multiple branches be allotted to a single firm?
Under what condition might multiple branches be allotted to a single firm?
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What is the annual timeframe in which audit assignments and renewals for Concurrent Auditors are given?
What is the annual timeframe in which audit assignments and renewals for Concurrent Auditors are given?
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How is the fee for Concurrent Auditors determined?
How is the fee for Concurrent Auditors determined?
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What happens to the fee for Concurrent Auditors if the total business volume of the branch increases during the audit tenure?
What happens to the fee for Concurrent Auditors if the total business volume of the branch increases during the audit tenure?
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What is the maximum fee charged for branches with a total business volume exceeding 250 crore?
What is the maximum fee charged for branches with a total business volume exceeding 250 crore?
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In what scenario can the fixed fee for Concurrent Auditors be revised?
In what scenario can the fixed fee for Concurrent Auditors be revised?
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Which of the following is NOT a reason for the removal or delisting of Concurrent Auditors?
Which of the following is NOT a reason for the removal or delisting of Concurrent Auditors?
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What is the fee for branches with a total business volume between 50 crore and 100 crore?
What is the fee for branches with a total business volume between 50 crore and 100 crore?
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Which additional cost must be considered alongside the fees for Concurrent Auditors?
Which additional cost must be considered alongside the fees for Concurrent Auditors?
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Who has the authority to make changes or revisions to the policy?
Who has the authority to make changes or revisions to the policy?
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What is the role of the nodal officer in the audit process?
What is the role of the nodal officer in the audit process?
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What must audit units ensure regarding deficiencies identified in concurrent audits?
What must audit units ensure regarding deficiencies identified in concurrent audits?
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What type of support should the bank provide to concurrent auditors?
What type of support should the bank provide to concurrent auditors?
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Who is responsible for ensuring follow-up on the concurrent audit reports?
Who is responsible for ensuring follow-up on the concurrent audit reports?
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What should be noted about pending issues from previous audit reports?
What should be noted about pending issues from previous audit reports?
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What is the purpose of providing a detailed checklist and operating guidelines to auditors?
What is the purpose of providing a detailed checklist and operating guidelines to auditors?
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What should happen once the concurrent audit assignment begins?
What should happen once the concurrent audit assignment begins?
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What should an auditor do if they suspect any element of fraud during an audit?
What should an auditor do if they suspect any element of fraud during an audit?
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How long should an auditor avoid any professional or commercial relationship with the borrowers of the institution they are auditing?
How long should an auditor avoid any professional or commercial relationship with the borrowers of the institution they are auditing?
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Which action is considered a 'don't' for auditors during an audit?
Which action is considered a 'don't' for auditors during an audit?
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What should an auditor refrain from doing regarding the sharing of audit observations?
What should an auditor refrain from doing regarding the sharing of audit observations?
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What is an auditor's responsibility regarding the submission of audit reports?
What is an auditor's responsibility regarding the submission of audit reports?
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What must an auditor not do in relation to the auditee's personnel?
What must an auditor not do in relation to the auditee's personnel?
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Which of the following actions is appropriate for auditors while conducting an audit?
Which of the following actions is appropriate for auditors while conducting an audit?
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What behavior is unacceptable for auditors in relation to their audits?
What behavior is unacceptable for auditors in relation to their audits?
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Study Notes
Audit Firm Responsibilities
- Audit work must not be subcontracted to outside firms or individuals, regardless of their qualifications.
- Firms must declare any credit facilities availed by themselves or their partners that could be non-performing according to RBI norms; false declarations will lead to termination of assignments.
- Complaints regarding concurrent auditors' referral of credit proposals for personal gain are not tolerated.
Termination Conditions
- Termination of concurrent auditor assignments occurs if the branch is closed, merged, or removed from concurrent audit responsibilities.
- No obligation for the bank to provide alternate branches for terminated auditors.
Appointment of Concurrent Auditors
- CA firms must be on the RBI-approved panel and assignments are based on branch size.
- Internal Audit Committee approves auditor appointments based on experience, resource availability, and location.
- Monthly fees are determined by the Board.
Tenure and Reappointment
- Initial tenure of concurrent audits lasts one year, extendable by two more years based on performance.
- A two-year cooling period applies for firms seeking reappointment in the same audit unit.
- Only one audit assignment per firm can be awarded at a time, though multiple branches may be combined under one assignment if resources permit.
Fee Structure
- Fees based on branch total business volume range from ₹7,000 to ₹12,000.
- Fees remain fixed throughout the audit tenure unless there is a complete business transfer.
Policy Review and Changes
- Fees for concurrent auditors will be reviewed as needed by the Board.
- The policy is subject to review based on regulatory changes and operational experiences.
Standard Operating Procedure
- Each audit unit needs a nodal officer for coordination and prompt resolution of deficiencies.
- Auditors receive checklists and guidelines to stay updated with relevant changes.
- Support is given through initial induction and management information systems (MIS) from the CBS platform.
Reporting Responsibilities
- Pending issues should persist in reports until resolved; any suspected fraud or negligence must be immediately reported.
- Auditors must maintain confidentiality regarding audit findings.
Professional Conduct and Restrictions
- Auditors must avoid any commercial ties with borrowers for at least three years.
- Prohibitions exist against using auditor status to solicit clients or customers of the bank.
- Auditors cannot represent clients post-audit term for a minimum period of three years.
- Sharing audit observations outside authorized personnel is forbidden, and auditors must maintain professionalism during audits.
Submission and Timeliness
- Timely submission of audit reports is critical, and delays are not acceptable.
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Description
Explore the critical responsibilities of audit firms, including their duty to avoid subcontracting and the consequences of false declarations. Understand the conditions for termination and the appointment process of concurrent auditors according to RBI norms.
