Audit Report and certification ABHAY V KAMAT

Audit Report and certification Branch Returns : correctness of branch returns Audit Report : True and fair view Memorandum of Changes (MOC) LFAR Tax Audit Report Certificates

Branch Returns All returns should be certified Correctness of returns should be ensured No changes are to be made in returns The changes are to be reported through MOC Corrections, overwriting, deletions etc. Care should be taken about correct preparation and correct reporting Even NIL return should be certified

Audit reports AS 700, 705, 706 should be followed Exceptions should be noted specifically (e.g. Provision for taxation, bonus, NPA) Auditor’s name and membership number should be mentioned Date of Audit Report and place of execution should be mentioned The report should be on the letterhead

Memorandum of changes(MOC) Memorandum of changes for : Assets and liabililities Income and Expenditure Changes in Asset classification In case there is no change…MOC with NIL remark should be submitted MOC is a part and parcel of the Audit report…Audit report without MOC is an incomplete report.

MOC ……..contd. Signature of the Branch Manager (BM) needs to be obtained on MOC as a token of acceptance In a situation where BM does not accept the change suggested by the Auditor, The auditor should issue the MOC, and A suitable note should be attached describing the reasons as to why the auditor feels the change is necessary

Long Form Audit Report (LFAR) LFAR to be submitted along with other audit reports in the prescribed form Audit report and LFAR are two separate documents, hence cross references should be avoided Care should be taken… The facts and opinion mentioned in the LFAR are not inconsistent with the opinion in the Audit Report

Tax Audit Report Form No. 3CD Accounting policies Additions to Fixed Assets Deductions/Write offs/Transfers of Fixed Assets Payment of Provident Fund and delays Payment of Profession Tax Payment of TDS or non deduction of tax

Tax Audit Report ……..contd. The details compiled by the branch managements should be checked Certificates/details to be obtained from the branch management Non violation of section 269SS & 269T of I.T. Act. Non violation of section 40A(3) of I.T. Act. Non violation of section 40(a)(i) and 40(a)(ia) of I.T. Act. Details of payments to parties specified in section 40A(2)(b) of I.T. Act

Other certificates Capital Adequacy Certificate relating to DICGC Cash position on different dates Utilization of the subsidy under Prime Minister Employment Generation Programme (PMEGP) Compliance of Ghose and Jilani committee recommendations Investments held on behalf of Head Office

Other certificates…….contd. Certificates for disclosure requirements Movement of NPA Advance to sensitive sectors Subsidy claim of riot borrowers Average rural advance

Abhay V. Kamat akamat@mmchitale.com Thank you Abhay V. Kamat akamat@mmchitale.com