3. An audit is an independent
investigation of financial statement of
an organization by the appointed
auditors as per terms of appointment
and statutory liabilities of auditor
with a view to express his
independent opinion.
Audit?
4. Bank Audit
The audit which is
independently examine
banking documents by
internal & external
auditors and published
an auditor’s opinion.
5. Why Bank Audit is Needed?
Increase of efficiency.
Quick presentation of accounts.
Preparation of interim accounts.
Knowledge of technical details.
Wide coverage.
Regularity of clients staff.
Moral check.
Allocation of audit work.
For identify error and frauds.
6. Types of bank audit
Bank Audit
External
Audit
Internal
Audit
7. Internal audit
Internal auditing is an independent, objective assurance
and consulting activity designed to add value and
improve an organization's operations. It helps an
organization accomplish its objectives by bringing a
systematic, disciplined approach to evaluate and
improve the effectiveness of risk management, control,
and governance processes.
8. External Audit
External audit is an audit conducted by an individual or firm
that is independent of the company being audited.
Independent auditors audit the books of a company generally
once per year after the completion of the company’s fiscal
year. Their role is to give an opinion of the financials
statements reflection of the status and operations of the
company being audited. Based on what they witness during
the audit they will also produce, for management and board
utilization, a management letter. Although a financial
statement audit is the most common type of external audit,
external auditors may also conduct special purpose audits
which might include; performing specific tests and
procedures and reporting on the results, a less intensive
review, and compilations
12. Bank Audit Process
Evaluation of Interval control
system
Preparation of audit programme for substantive
testing and it’s execution.
Preparation and submission of Audit
report
Administrative
Controls.
Priliminary Audit
Accounting
Controls.
13. Bank closing set.
Audit report.
Long form Audit report.
Memorandum of changes.
Report on Ghosh.
Other certificates.
14. Audit aspect of items of profitand loss
Check whether all income are properly accounted for.
Check if income on NPAs is not recognized.
Check if Bank has charges Penal interests on default cases.
Verify receipt of Locker Rent
Vouch for expenses.
Check if expenses are grouped in proper headings.
Check whether TDS is deducted on expenses as per applicable
sections and deposited to the credit of government.
Check items of ‘Misc Expenses’.
Whether Reverse Charge on Service Tax has been created?
15. Audit of IT Computer
System in Bank
IT Processes 22 audit
area
Banking Applications
27 Audit Areas
Subsidiary IT Audits
18 Audit Areas
• Securities & Treasury
Applications
• Commercial Loans
• ATM
• Credit CardsSystem
• Core Banking
(Deposits)
• Consumer Loans
• Accountancy
.......
• Telephone Banking
• GarantiBank SA.
• Garanti Pension & Life
Insurance
• Garanti Leasing
• Garanti Securities
• Garanti Factoring
• Garanti Asset Man.
• Garanti Bank Moscow
• Garanti Mortgage
…..
• IT Audits
( IT Governance, IT Strategy &
Source Planning )
• Security Audits
( Network/ Info. Security,...)
• General Process Audits
( Software Development, Change
Management... )
• Infrastructure Audits
( Database Management,,
System Software Manag... )
• Disaster Recovery Audits
16. AppointedAuditors
Appointment of Auditor
First Auditor
Appointed this auditor
within 60 days of the
incorporation(under section
252)
Appointed the professional
auditor
Subsequent Auditor
At the conclusion of 1st
general meeting,first
auditor retired, subsequent
auditor appointed
17. Qualification and Disqualification of Auditors
• Competencies in business acumen ,technical
capacity,ethical conduct & financial management.
• Required education.
• Minimum experience.
• Security clearance.
• Perfaction in his job.
• Maintaining authenticity of data.
Qualification of
an Auditor
• Present or past director,officer or employee of the
bank.
• A relative of bank manager.
• A person who is indebted to the bank.
• A body corporation.
• A person who is disqualified for appointment by
the organization.
• A person who has been convicted by a court.
Disqualification
of an Auditor
19. Auditors Report
There are four kinds of report. Auditors can express
any of them by examine all documents of a bank.
Those report are-
1. Qualified Report.
2. Unquqlified Report.
3. Adverse Report.
4. Disclaimer Report.
20. Future audit
With the developments in banking sector,classical audit practices changed to modern audit
methodologies.
Traditional Methods Modern Methods
Focused in findings errors Focused in system,process and risk
Issue Prevention
Focused to past Focused to future
Financial losses Efficiency
Labor intensive System intensive
Based on problem Based on solution
21. For making this I consulted with the manager and
internal auditor of Southeast Bank Limited for making
this presentation more perfect and attractive.
