Sales audit procedures for banking

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[Music] now let's start with auditing standards basically with audit report in the audit report we state we have conducted our audit in ance with generally accepted auditing standards non complaints to this statement will lead to penal penal action under section 21 of Chartered Accountants Act may result in disciplinary action for non-compliance of auditing standards while carrying out the audit so let's try to understand these auditing standards major auditing standards we have to comply as a part of bank on it or a documentation or documentation is not just a simple checklist where we put on followed yes no all right there is an honor documentation with respect to the opinions expressed all the documentation should have how I have carried out analytical procedures audit documentation should have the support of audit samplings that have picked up all the documentation should have the study of sa 3 1 5 audit documentation should have audit planning all documentation should have the communication between the auditor and management this is si 240 auditors responsible to relate you to rod we need to before we understand this we need to understand early warning signals issued by the RBI and si 240 the effect of ineffective controls on fraud is well described in Appendix 1 2 3 of si 240 we need to understand as a part of corporate governance the bank management is also responsible for consideration of laws and regulations in our differential statements even an auditor has considered laws and regulations in an audit of financial statements then communicate with those charged with the governance those deficiencies we have observed plan an audit before planning and ordered an auditor needs to understand si 3 1 5 collect evidences of material statements make analytical procedures analytical procedures helps us deciding on the audit sampling correct written representations with the management communicating to them through essay to 61 to 65 through an audit note and finally in conclude let's try to sum of all the auditing standards through one simple flowchart now assertions the financial statements carry assertions the assertions those assertions are existence completeness evaluation rights and obligations presentation and disclosure the potential statements has an item of fixed assets the fixed assets should be in existence auditor has to carry out an audit test through compliance tests and substantive you test analytical procedures that the values mentioned for the fixed assets are thorough and fair so in this way the value of loans and advances devaluation is true and fair that I can state only by carrying out the audit test against compliance and substantive you test through analytical procedures as a part of audit test compliance and substantive procedures are carried out and if I am able to highlight the risk of material misstatements those observations are communicated to the management those sharks faith management those charged with governance if observations are agreed if required material then a provision needs to be carried for example if an audit test of complaints and substantive procedure indicates deficiencies of controls around the banking operations which is resulting in 100 is closed NPS then those observations if management agrees needs to be provided as per pirate norms and in my earlier video we have understood the impact of frauds and NPS so here we have to spend much time on complaints and substantive procedures because there is an indication in the banking industry that the frauds and NPS are understated hence is we have to spend good amount of time on complaints and substantive procedures now coming back again if the management doesn't agree there is no possibility to rectify then they can disclose in the notes on accounts certain issues and as an auditor if if such observations are not having an effect on the material misstatement those things can be brought onto the face of the audit report through an emphasize matter this is in short the total audit process as an auditor I need to document the total process flow in support of my opinion