1. EXPECTATIONS FROM BRANCH AUDITORS Panel Discussion CA JAGDEESH DHONGDE

2. Expectations from Branch Auditors General Expectations Expectations Regarding audit of advances Expectations regarding Tax Audit Expectations about LFAR Fixed assets and Depreciation CA JAGDEESH DHONGDE

3. General Expectations Attend the Branch auditors’ meet if organised by the Bank without fail. Read the Circulars issued by RBI as a Home work before commencement of the audit along with Guidance Note Go through the Closing Circular issued by the Bank Send the copies of TAR, LFAR, Balance Sheet as suggested by the Bank. Ensure no signatures or stamps are missing. CA JAGDEESH DHONGDE

4. General Expectations Give your comments on advances and other matters in the annexures of LFAR. As far as possible avoid giving any separate report. Scrutinise all the account heads of Trial Balance and Profit and Loss account at the Branch CA JAGDEESH DHONGDE

5. General Expectations Don’t insist on MOC when it is below Rs 5000/- or the limit prescribed by the Bank The provisions regarding depreciation, life of assets as prescribed in the Companies Act 2013 are not applicable to the Banks. Please don’t qualify your report on this count. CA JAGDEESH DHONGDE

6. General Expectations Focus on Audit of Large advances, Classification of Advances, Unreconciled entries and reporting of frauds. In case of doubt don’t hesitate to contact Zonal Managers and/or SCAs. Adhere to the time schedule. Following are the Holidays during Audit period : March 24,25,26,27 April 3,8,9,10,14,15 17, 19 CA JAGDEESH DHONGDE

7. Expectations about audit of advances Check the CBS data in respect of large advances. i.e. date of sanction, repayment schedule, moratorium etc. Check up whether any NPAs are marked as Standard by the System. Go through the Concurrent audit reports of the Branch to see whether there are any material comments about advances CA JAGDEESH DHONGDE

8. Audit of Advances contd.. In case of Cash Credit accounts verify Stock and Debtors Statements as the SCAs rely on you in this matter. Ensure that the statements are latest one. In case of substandard and doubtful advances ensure that the security value is correctly entered in the system as this has a bearing on the provisioning. Verify whether External Credit Ratings are available in respect of advances more than Rs 5 Crores. CA JAGDEESH DHONGDE

9. Audit of Advances Contd… Upgradation of Accounts from NPA to Standard to be carefully checked. Asset Classification of Restructured Advances to be checked with reference to Master Circular Inter Bank Participation Certificates – The exposure is substantial in amount. Check all the documentation, sanctions etc. CA JAGDEESH DHONGDE

10. Expectations about Tax Audits Give adequate time for Tax Audits. It is observed that being the last item on the Menu it is done in a haste. Carefully scrutinise the Form 3CD filled by the Branch. Knowledge of the Branch Staff about Income tax may be limited. 40 (a ) Disallowance requires due attention and care from the Branch auditors. Submission of Form no 15 G and 15 H to be test checked : Online Procedure wef October 1, 2015 CA JAGDEESH DHONGDE

11. Expectations about Tax Audit The Branch staff sometimes makes mistakes in mentioning assessment year and wrong sections on the TDS Challans. Bring such mistakes to the attention of the Branch Managers immediately so that the correction can be made by the time Bank’s total TAR is finalised. Penalties for Non/ Delayed Payment of Profession tax & late submission of Prof tax returns are common and therefore to be reported under clause 21 ( a ) of Form no 3CD Confusion was noticed about the TDS amount and ‘ Payment on which TDS is not deducted -Clause 21(b)(ii )A CA JAGDEESH DHONGDE

12. Expectations about Tax Audit contd Electricity Charges and Telephone charges were found reported u/s 43 B. Verify the collection and payment of VAT/ Sales tax in respect of sale of assets etc and in case of non payment report u/s 43 B Check whether the deduction and payment of Income tax on Interest paid to NRI is correctly done. CA JAGDEESH DHONGDE

13. Expectations about LFAR The LFAR annexures are now to be uploaded in the System by giving Precoded observations. Give the correct observation Don’t only upload only the account details without giving the observations Ensure that the LFAR comments are uploaded by the Branch staff in your presence. Changes in the classification of advances should not be reported under LFAR but the MOC to be passed. CA JAGDEESH DHONGDE

14. Fixed Assets and Depreciation The purchase bills of furniture items purchased by the Bank and given to their Managers for use should be in the name of the Bank and not in the name of Managers as these assets are capitalised in the books of the Bank. If there is any deviation please report. Ensure that the classification of fixed assets purchased during the year is appropriate and as per the Bank’s standard practice. Check up the depreciation with reference to the rates given by the bank in the closing circular. CA JAGDEESH DHONGDE

15. SCAs and Branch Auditors Only 20 branches are audited by the SCAs Therefore the final audit of the Bank as a whole by SCAs largely depends upon the work done by the Branch Auditors. Branch auditors can give valuable feed back to the SCAs regarding the functioning of the Bank at the field level. The open communication and coordination between the Branch Auditors and SCAs contributes to the effective audit of the Bank as a whole. CA JAGDEESH DHONGDE

16. THANK YOU ! CA JAGDEESH DHONGDE