1. BANK BRANCH AUDITS EFFICIENT AND EFFECTIVE AUDIT AN INTEGRATED APPROACH 22 March CA SRIPRIYA KUMAR

2. Using Excel – Program Structure
Bank Branch Audit – Key aspects
Understanding Database concept
CBS environment
Why Excel – Efficient and Effective audits
The Tool kit
Basic commands in excel for bank audits
Live demonstration
One hour talk on Bank Audits – Advances
Do it Yourself mode

3. Bank Branch Audits – An overview – Scope and objective
The basic objective of Bank Branch audits is to provide an opinion on True and Fair status of the financial statements as at the Balance Sheet date
The key reports issued are :
Branch Auditors Report
Certified Copies of the Balance Sheet and Profit and Loss Account
Long Form Audit report
Tax Audit report under Section 44AB of the Income Tax Act
Special reports and certificates
A Unique feature in a bank audit is that unlike in corporates, we are also required to confirm if the transactions of the branch which have come to our notice have been within the powers of the bank.
Auditors Report & on Financial statements
Long Form Audit Report
Tax Audit reports
Standard and Special Certificates

4. Bank Branch Audits – Unique Dynamics
Assets and Liabilities are properly stated
Income and Expenses are completely and accurately accounted
Internal Controls over Banking operations
RBI norms and circulars are properly complied
The Branch Auditors Report is an objective certification of the True and Fair position of the P&L and the Branch Balance Sheet
Additionally, we are required to provide assurance on status of regulatory compliances and internal controls in the following sign offs namely the :
LFAR
Ghosh Committee recos
Jilani Committee recos

5. The Landscape Internal controls over banking Operations
Bank Branch Audits
True and Fair - Asset quality / Income Assurance
Internal controls over banking Operations
RBI norms / KYC / AML etc
Observation, Inquiry , Computation, Analytical Review, Inspection
LFAR
Fin. statements
Certificates
Terms
Compliance Tests and Substantive Tests
Master Circular on IRAC norms
Concurrent Audits , RB audits, Inspections
Engage and Planning
Audit working papers
Reports

6. Balance Sheet Audit Balance Sheet of a Bank as finally presented
Schedule –1 Capital
Schedule –2 Reserve and surplus
Schedule –3 Deposits
Schedule –4 Borrowings
Schedule –5 Other Liabilities and provisions
Schedule –6 Cash and bank balance with RBI
Schedule –7 Balance with bank and money at call and short notice
Schedule –8 Investments
Schedule –9 Advances
Schedule –10 Fixed Assets
Schedule –11 Other Assets
Schedule –12 Contingent Liability

7. Understanding CBS environment
Core Banking solutions are integrated farmeworks that automates all aspects of core banking operations across entities, languages and currencies.
Master data , transaction data , access restrictions and business process logic is all in built in the CBS platform minimising and mostly eliminating need for manual intervention beyond input stages
Core banking solutions helps banks with:
Entire range of banking products including savings, checking, overdraft and deposit accounts
Entire range of lending products
Complement of transactional services including remittance, foreign exchange, cards and trade finance
Accessibility through multiple channels, including mobile banking and web
Full integration of front-, middle-, and back-office processes
Accurate, timely and actionable information about customer relations
Single view between bank and customer
“Anytime anywhere” banking

8. Understanding CBS environment
CBS does not obviate the need for bank branch audits because
NPA classifications are mostly manual
Work flow integration for documentation aspects is not complete across all banks. Hence documentation and security cover lapses may still impair asset quality
No scale and complexity of automation can substitute human intuition
CBS is a good audit enabler as it permits simple views of large transactions , by excel manipulation of text files and helps us to profile and stratify data for sample selection

9. Need for MS Excel in bank audits
Data Volume
Enables a good look and feel of the transactions that are audited
Sample Selection
Identification of samples for audit
It is possible
CBS outputs are there as text files that can be converted to excel
And to top it all a Very complex regulatory framework
Integration
Seamless integration of work done and working papers for the audit
Analytical Procedures
Easy to recheck interest calculations, NPA movements etc

10. Bank Audit Tool kit Reliance of other Audit reports
Use of CBS base and Exception reports
Appropriate Sampling and use of excel
Integrated Documentation

11. Using Excel Using Excel functions to perform work
Understanding relevant files in bank branches
Creating Folders to manage work
Integrated Documentation

12. Assign Responsibility
Creating Folders
A. Data from the Bank
B. Signed Reports and Certificates
C. Loans related
D. Deposits Related
E. LFAR tests
F. P&L items
G. Other Areas
H. Miscellaneous Files
Assign Responsibility
Standardisation
Clarity

13. Part 1 – Basic Excel Commands
File – Open, Close, Save, Save As
Insert – Worksheet, Row, Column
Copy , paste, paste special , paste values
Delete – rows, columns
Sort
Filter
Select – rows, columns, visible cells
Find , Find and Replace
Auto sum , if commands
Window Freeze pane
Column and Row – width, height etc
Hide and unhide, row, column and sheet
Vlook up
Pivot tables
Edit, go to, fill
Text to Column
Any others

14. Loan Files Loan balance file and CCOD file
Specially Marked Accounts File
Irregular file
NPA file

15. Part 2 – Working on the loan file
Save the File
Data – text to column
Numbering of records – the need to
Parse the file and create a new excel file
Summarise and check with balance sheet
Sort to identify the top loans by category
Using filters
Copy and paste the sample to work sheets created for the purpose
Vlook up with IRR / SMA / NPA files
NPA movement analysis

16. USING MS EXCEL
Obtain Text File
Save to excel work book
Block area of data to be converted ( Select)
Use function Data - text to columns
Finish the Action by clicking finish
Check for texts in number fields
Ensure that numbers are not truncated
Select Fixed Width option
Index all transactions by nature of advance / deposit type
Eliminate blank rows
Check the balances of the file with the Balance Comparison report
Sort by Loan type by amount
Report exceptions in LFAR / provision for NPA
Complete the template
Select data for audit , document in standard Work template
Classify by year using year() function

17. THANK YOU GOOD LUCK 