I write this to once again bring to your attention that:
- The audit reports in respect of audits of financial statements for periods beginning on or after 1st April 2012 are to be issued in this revised format. The text of the revised auditor’s report format appears in the Appendix to the Revised SA 700 and can be downloaded from website of the Institute of Chartered Accountants of India at URL: http://icai.ind.in/newsletter/lt.php?c=2003&m=1556&nl=610&s=ff9f3e744a8515f2a074fcc00347fad6&lid=6857&l=-https--sinprd0111.outlook.com/owa/redir.aspx--Q-C--E-2MoHeipw4kqLRn817ljiNqcuALWd6s8II4mvzelMkQZVKiZeRNgRU3w1lTbujKxk9k76fl91mFk.--A-URL--E-http%3a%2f%2f220.227.161.86%2f17874sa700annx1.pdf .
- For the ready reference of members carrying out audit of banks/ bank branches, the Auditing and Assurance Standards Board of ICAI has developed relevant audit report formats in line with the requirements of the revised SA 700 which are once again attached for your perusal.
- Further, members undertaking bank branch audits are also requested that, pursuant to a recent communication by the Reserve Bank of India to ICAI in this regard, the total number and amount of debits/ credits arising pursuant to the Memorandum of Changes submitted by them, be given under the heading “Other Matters Paragraph” on the face of the bank branch audit report/s issued by them. Necessary guidance in this regard is being provided in the 2013 Guidance Note on Audit of Banks which would be issued soon.
Regards,
Chairman, Auditing & Assurance Standards Board
An
Illustrative Format of Report of the Auditor of a Banking Company
INDEPENDENT AUDITOR’S REPORT
To
The Shareholders
Report on the Financial Statements
1. We
have audited the accompanying financial statements of the ABC Bank Limited,
which comprise the Balance Sheet as at 31st March, 2XXX
and the Statement of Profit and Loss and the cash flow statement for the year
then ended and a summary of significant accounting policies and other
explanatory information. Incorporated in
these financial statements are the returns of ________ branches audited by us,
______________ branches audited by branch auditors and unaudited returns of
______________ branches in respect of which exemption has been granted by the
Central Government under Rule 4 (1) (a) of the Companies (Branch Audit
Exemption) Rules, 1961 from the provisions of sub-sections (1) and (3) of
Section 228 of the Companies Act, 1956. These unaudited branches account for
______________________ per cent of advances, _______________ per cent of
deposits, ___________________ per cent of interest income and
____________________ per cent of interest expense.
Management’s Responsibility for the Financial Statements
2. Management
is responsible for the preparation of these financial statements in accordance with
XYZ Law of India. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation of the financial
statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
3. Our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of India. Those Standards require
that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
from material misstatement.
4. An
audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on
the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant
to the Company’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
5. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
6. In
our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the notes thereon
give the information required by the Banking Regulation Act, 1949 as well as
the Companies Act, 1956, in the manner so required for the banking companies
and give a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the
case of the Balance Sheet, of the state of affairs of the Bank as at 31st March, 2XXX;
(ii) in the
case of the Profit and Loss Account of the profit/loss for the year ended on
that date; and
(iii) in the
case of the Cash Flow Statement, of cash flows for the year ended on that date.
Report on Other Legal and Regulatory Matters
7. The Balance
Sheet and the Profit and Loss Account have been drawn up in accordance with the
provisions of Section 29 of the Banking Regulation Act, 1949 read with Section
211 of the Companies Act, 1956.
8. We report
that:
(a) we
have obtained all the information and explanations which, to the best of our
knowledge and belief, were necessary for the purpose of our audit and have
found them to be satisfactory.
(b) the
transactions of the Bank, which have come to our notice, have been within the
powers of the Bank.
(c) the
returns received from the offices and branches of the Bank have been found
adequate for the purposes of our audit.
9. In
our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement
comply with the Accounting Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956.
10. We further report that:
(i) the
Balance Sheet and Profit and Loss Account dealt with by this report, are in agreement
with the books of account and the returns.
(ii) in
our opinion, proper books of account as required by law have been kept by the
Bank so far as appears from our examination of those books.
(iii) the
reports on the accounts of the branches audited by branch auditors have been
dealt with in preparing our report in the manner considered necessary by us.
(iv) as
per information and explanation given to us the Central Government has, till
date, not prescribed any cess payable under section 441A of the Companies Act,
1956,
(v) on
the basis of the written representation received from the directors and taken
on record by the Board of Directors, none of the directors is disqualified as
on 31st March, 2XXX from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
For ABC and Co.
Chartered Accountants
Signature
(Name of the Member Signing the Audit Report)
(Designation)#
Membership Number
Firm Registration Number
Place of Signature:
Date of Report:
# Partner or proprietor, as the case may be.
An Illustrative
Format of Report of the Auditor of a Nationalised Bank
INDEPENDENT
AUDITOR’S REPORT
To
The President of India
Report On The Financial Statements
1. We
have audited the accompanying financial statements of XY Bank as at 31st March, 2XXX,
which comprise the Balance Sheet as at March 31, 2XXX, and Statement of Profit
and Loss and the cash flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information. Incorporated
in these financial statements are the returns of ___________ branches audited
by us and ______________ branches audited by branch auditors. The branches
audited by us and those audited by other auditors have been selected by the
Bank in accordance with the guidelines issued to the Bank by the Reserve Bank
of India.
Also incorporated in the Balance Sheet and the Statement of Profit and Loss are
the returns from _______________ branches which have not been subjected to
audit. These unaudited branches account for ___________________per cent of
advances, _____________ per cent of deposits, _______________ per cent of
interest income and _______________ per cent of interest expenses.
Management’s Responsibility for the Financial Statements
2. Management
is responsible for the preparation of these financial statements in accordance
with XYZ Law of India. This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation of the
financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
3. Our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with the Standards on Auditing
issued by the Institute of Chartered Accountants of India. Those Standards
require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
4. An
audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on
the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant
to the Company’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
5. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
6. In our
opinion, as shown by books of bank, and to the best of our information and
according to the explanations given to us:
(i) the
Balance Sheet, read with the notes thereon is a full and fair Balance Sheet
containing all the necessary particulars, is properly drawn up so as to exhibit
a true and fair view of state of affairs of the Bank as at 31st March 2XXX in conformity with accounting principles generally
accepted in India;
(ii) the
Profit and Loss Account, read with the notes thereon shows a true balance of
profit/loss, in conformity with accounting principles generally accepted in
India, for the year covered by the account; and
(iii) the Cash
Flow Statement gives a true and fair view of the cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
7. The Balance
Sheet and the Profit and Loss Account have been drawn up in Forms “A” and “B”
respectively of the Third Schedule to the Banking Regulation Act, 1949.
8. Subject to
the limitations of the audit indicated in paragraph 1 to 5 above and as
required by the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970/1980, and subject also to the limitations of disclosure required therein,
we report that:
(a) We have
obtained all the information and explanations which to the best of our
knowledge and belief, were necessary for the purposes of our audit and have
found them to be satisfactory.
(b) The
transactions of the Bank, which have come to our notice have been within the
powers of the Bank.
(c) The
returns received from the offices and branches of the Bank have been found
adequate for the purposes of our audit.
9. In
our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement
comply with the applicable accounting standards.
For ABC and Co.
Chartered Accountants
Signature
(Name of the Member Signing the Audit Report)
(Designation)#
Membership Number
Firm registration number
Place of Signature:
Date of Report:
# Partner or proprietor as the case may be.
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