ICAI releases 2025 Edition of exposure draft of Guidance Note on Bank Audits
ICAI has invited comments and feedback on the draft, which will remain open for suggestions until February 5, 2025
ICAI – Bank Audits – Guidance Note on Bank Audits – taxscan
ICAI – Bank Audits – Guidance Note on Bank Audits – taxscan
The Institute of Chartered Accountants of India (ICAI) has published the 2025 Edition of the Exposure Draft for its Guidance Note on Audit of Banks. This comprehensive document provides chartered accountants with updated insights, standards, and methodologies for conducting audits in the rapidly evolving banking sector.
The document, released by the Auditing and Assurance Standards Board (AASB) of ICAI, outlines the scope, framework, and best practices for auditing banks. It incorporates recent changes in banking regulations, technological advancements in digital banking, and updates in risk management procedures.
By aligning these aspects with auditing practices, the guidance aims to ensure that bank audits are performed with accuracy and transparency, adhering to the highest professional standards.
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The Exposure Draft is divided into two sections:
Statutory Central Audit and Bank Branch Audit, each addressing specific functions and areas of focus for auditors. Key topics include statutory compliance, treasury operations, information technology audits, risk management, credit monitoring, and the verification of financial documents. It also covers essential guidelines on auditing retail banking, international banking divisions, and government business departments, among others.
One of the critical aspects of the guidance is its emphasis on auditing procedures in the context of digital banking and IT systems. With the proliferation of digital banking services, the draft provides insights into auditing digital lending platforms, cybersecurity frameworks, and compliance with RBI's digital banking regulations.
It also revisits the importance of IT general controls and the role of disaster recovery mechanisms in safeguarding banking operations.
The guidance note further delves into procedures for auditing statutory requirements, including compliance with Know Your Customer (KYC) norms, Anti-Money Laundering (AML) measures, and Reserve Bank of India (RBI) directives. Additionally, it offers practical insights for auditors on tackling challenges related to fraud detection, verification of advances, and ensuring accurate presentation of financial statements.
Comments Invited
ICAI has also urged stakeholders, including auditors, banking professionals, and regulators, to provide detailed comments on the draft. Feedback can be submitted via email to aasb@icai.in or addressed to the Secretary of the AASB at ICAI Bhawan, New Delhi.
The finalized guidance note is anticipated to be an indispensable resource for auditors, aiding them against the challenges of auditing in a dynamic financial landscape.
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