FAQs on Professional Ethics of CAs Conducting Bank Audits

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FAQs on Professional Ethics of CAs Conducting Bank Audits

FAQs on Professional Bank Audits

The Ethical Standards Board of the Institute of Chartered Accountants of India (ICAI) provides some FAQs on the Ethics of the Professionals during the Audit of any Banking Institution.

This article will detail these FAQs on the Professional Ethics of Chartered Accountants conducting Bank Audits for any Financial Year.

FAQs on the Professional Ethics of Chartered Accountants conducting Bank Audits

Q.1 – Can a Chartered Accountant Firm accept and conduct the Audit of a Bank where one of the partners has taken a loan from the same branch or any other branch of the Bank?

Ans: No, the Chartered Accountant Firm can not accept or conduct the Audit of a Bank where one of the partners has taken a loan from the same branch or any other branch of that Bank. The members are suggested that they should stand clear of the situations that may jeopardise or compromise the status of the firm of the professional.

Q.2 – Can a Chartered Accountant be a Statutory Auditor of any branch of a bank if he is acting as a Revenue Auditor of the same or any other branches of the bank?

Ans: no, the Chartered Accountant be a Statutory Auditor of any branch of a bank if he is acting as a Revenue Auditor of the same or any other branches of that bank.

Q.3 – Can a Chartered Accountant accept and conduct a Concurrent Audit and Quarterly Review of any Bank simultaneously?

Ans: No, the Chartered Accountant can not accept or conduct a Concurrent Audit if he is conducting a Quarterly Review of any Bank simultaneously, as the Guidance Note on Independence of Auditors includes a provision that an internal audit and a statutory audit can not be conducted by the same Chartered Accountant simultaneously. So, the Concurrent Audit being a kind of Internal audit and the Quarterly Review being a kind of Statutory audit, can not be conducted simultaneously

Q.4 – Can a Statutory Auditor, conducting the audits of 3 different branches of any bank, accept and conduct the Concurrent Audit of the Bank?

Ans: According to the provisions of the Principle Of Strict Independence, a Statutory Auditor can not accept or conduct a Concurrent Audit of the Bank if he is already conducting the audits of 3 different branches of that bank.

Q.5 – Can an Internal Auditor of any bank accept and conduct the Consultancy Works of the same Bank?

Ans: Yes, the Internal Auditor of any bank can accept and conduct the Consultancy Works of the same Bank. There are no restrictions over this..

Q.6 – Can a Statutory Auditor of any Bank accept and conduct a Concurrent Audit of the Sponsor Bank?

No, a Statutory Auditor of any Bank can not accept or conduct a Concurrent Audit of the Sponsor Bank as the relationship between both parties is that of a Holding and Subsidiary companies according to the Companies Act, 2013.

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Q.7 – Can a Statutory Auditor of any bank accept and conduct the Stock Audit of any branch of the same Bank?

Ans: No, a Statutory Auditor of any bank can not accept and conduct the Stock Audit of any branch of the same bank as any management function (Stock Audit) and the statutory audit can not be conducted simultaneously.

Q.8 – Can a Statutory Auditor of any bank accept and conduct the Tax Audit of the same Bank?

Ans: No, a Statutory Auditor of any bank can not accept or conduct the Tax Audit of the same Bank as the Code of Ethics related to audits states that a statutory audit and an internal audit can not be conducted simultaneously and doing so will also be a breach of Section 288 of the Income Tax Act, 1961 that states that the Concurrent Audit and Tax Audit can not be conducted simultaneously.

Q.9 – Can a Concurrent Auditor of any Bank accept and conduct a Limited Review of the same Bank?

Ans: No, a Concurrent Auditor of any Bank can not accept or conduct a Limited Review of the same Bank.

Q.10 – Can a Certified Information System Auditor (CISA) of any bank accept and conduct a Credit Appraiser of the same Bank, simultaneously?

Ans: Yes, a Certified Information System Auditor (CISA) of any bank can accept and conduct a Credit Appraiser of the same Bank, simultaneously only if he ensures that no conflict of interest will arise.

Q.11 – Can an Auditor of any bank carry a Credit Card of the same bank?

Ans: Yes, an Auditor of any bank can carry a Credit Card of the same bank but he should remember that if he has an outstanding balance of Rs. 10,000 above the credit limit or any other limit prescribed under the credit card provisions of the bank then, indebtedness will apply to the cardholder.

Q.12 – Can a Concurrent Auditor of any bank accept and conduct a Statutory Audit of the same bank after the completion of the concurrent audit?

Ans: Yes, a Concurrent Auditor of any bank accepts or conducts a Statutory Audit of the same bank after the completion of the concurrent audit but he can also refuse to conduct the statutory audit if he wishes to continue the concurrent audit. He should also remember that he can not accept the statutory audit if the concurrent audit is not completed on the offer date of the statutory audit.

Q.13 – Can a Statutory Auditor of any bank accept and conduct assignments like System Auditor, Internal Audit and other Management Consultancy services for the same bank?

Ans: No, a Statutory Auditor of any bank can not accept or conduct assignments like System Auditor, Internal Audit and other Management Consultancy services for the same bank as the provisions of Guidance Note on Independence of Auditors prohibits to do so within a year of completion of the Statutory Audit.

Q.14 – Can an Incoming Auditor of any bank contact the retiring auditor through email?

Ans:Yes, an Incoming Auditor of any bank contact the retiring auditor through email but a proof of delivery will be kept by the auditor on the receipt of acknowledgement of the communication with the retiring auditor through the email.

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