1. Audit Report and certification
ABHAY V KAMAT

2. 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

3. 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

4. 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

5. 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.

6. 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

7. 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

8. 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

9. 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

10. 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

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

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