Certification and Highly Qualified Requirements and ISEE Staff Reporting.
Session 3 LFAR Reporting & Other Certification · Session 3 LFAR Reporting & Other Certification...
Transcript of Session 3 LFAR Reporting & Other Certification · Session 3 LFAR Reporting & Other Certification...
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Seminar on Statutory Audit of Bank Branches
WIRC Mumbai
Session 3 LFAR Reporting & Other Certification
CA Niranjan Joshi12.03.2016
Restriction on Disclosure and Use of DataThe data in this document contains trade secrets and confidential or proprietary information of my firm, the disclosure of which would provide a competitive advantage to others. As a result, this document shall not be disclosed, used or duplicated, in whole or in part, for any purpose other than to evaluate my firm. The data subject to this restriction are contained in the entire document.
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Disclaimer
These are my personal views and can not be construed to be the views of the ICAI or my firm.
No representations or warranties are made by the WIRC with regard to this presentation.
These views do not and shall not be considered as a professional advice.
This presentation should not be reproduced in part or in whole, in any manner or form, without our written permission.
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Agenda
LFAR Reporting
Certification
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Statutory Audit Report
Format as per SA 700Addressed to SCACompliance with Accounting Standards to be mentioned in main report.Qualifications can be through Memorandum of Changes or Specific remarks in the last para.Illustrative Format Bank Audit Guidance Note 2016
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Long Form Audit Report
LFAR is a effective tool to the auditors to keep the Bank informed about the important matters arising out of the statutory audit exercise.LFAR for Branches is a question answer format, LFAR for HO is a narrative format. Annexure to be given along with the LFAR which is applicable for branches having large/ irregular/ critical advance accounts having large limits.LFAR introduced in 1985, subsequent revision in 1992-1993 and 2003.
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Long Form Audit Report
The Branch is responsible for compiling the information / statements required for LFAR and the auditors should verify the same.Auditors should ensure that the documentation of files is adequate and the records and working papers are planed and filed systematically in respect of matters included in the LFAR. Regional Office / Zonal Office / Head Office / Statutory Central Auditors / External Auditors / RBI auditors etc. are the various users of the LFAR
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Long Form Audit Report
Internal control evaluation questionnaire
Comprehensive in scope and coverage
Covers Balance Sheet & Profit & Loss A/c
Important check list for Audit Plan
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LFAR Audit Approach
Read All questions in LFARPlan & Design Audit Program to cover all aspects of LFARPrepare separate checklists for each point to be reported.Record the extent of checking / sample selected.Proper documentation & collecting SAAE during the audit.Write descriptive answers. Avoid Y/N/NAInclude facts, figures and examples to the extent possible in all answers to the questions.
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LFAR Audit Approach
Observations resulting in adjustments to account heads needs to be reported along with MOC
Discuss the contents of report with Branch Management
Obtain Management Representation from Branch Manager on various matters based on Audit.
LFAR is an independent report, hence do not give cross reference or qualifications or MOC in LFAR.
It’s a very important report for readers such as SCA and Management of Bank.
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I – Assets1. Cash
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I – Assets1. Cash
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I – Assets 2. Bank Balances
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I – Assets 3. Money at Call and Short Notice
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I – Assets4. Investments
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I – Assets 5. AdvancesC
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I – Assets 5. AdvancesC
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I – Assets 5. AdvancesC
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I – Assets 6. Other AssetsC
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II – Liabilities 1. DepositsC
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II – Liabilities 2. Other/ContingentC
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III – Profit and Loss AccountC
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IV – GeneralC
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IV – GeneralC
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IV – GeneralC
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LFAR for Specialised BranchesC
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Certification
Audit Report is a reasonable Assurance
Audit Certificate is Absolute Assurance
Types of Certificates
- Branch Returns
- Audit Reports
- Memorandum of Changes
- LFAR
- Tax Audit Reports
- Jilani & Ghosh Certificate
- Other Certificates
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Other Certificates
Capital Adequacy – BASEL I, II, III
DICGC ClaimsPMRY CertificationService TaxCash Balance 12 odd daysInvestment – Behalf of Head OfficeMaturity Pattern (Bucket)Fixed Assets & DepreciationInterest Subvention (Exports/ Agriculture)
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Other Certificates
IRAC / NPA Related Certificates
Interest Subvention
Restructured Advances / SMA
Foreign Currency Assets & Liabilities
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Questions
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CA Niranjan Joshi, B.Com., FCA, DISA (ICAI)Email: [email protected]
Cell: 9819078061