Concurrent audit is a systematic and
timely examination of financial transaction on a regular basis to ensure
accuracy, authenticity, compliance with procedures and guidelines.The
emphasis under concurrent audit is not on test checking but on substantial
checking of transactions.
The concept of concurrent audit has been
introduced to reduce the time gap between occurrence of transaction and
is overview or checking. The concurrent audit serves the purpose of effective
control as it is normally conducted by external agencies like chartered
accountants firms.
Scope
Concurrent audit is an examination, which
is contemporaneous with the occurrence of transactions or is carried out
as near thereto as possible. It attempts to shorten the interval between
a transaction and its examiantion by an independent person not in its
documentation. In concurrent audit, there is an emphasis in favour of
substantive checking in key areas rather than test checking.
This concurrent audit is essentially
a managment process integral to the establishment of internal accounting
functions and effective controls and setting the tone for a vigilance
internal audit to preclude the incidence of serious errors and fraudulent
manipulations.The main focus while conducting concurrent audit it to ensure
that transactions are not dealt with in routine but in adherence with
the systems and procedures laid down. The study of various fraudulent
transactions with the systems and procedures, by the bank employees, which
resulted in misuse of one's position. Hence, the focus of concurrent audit
is on adherence to laid down systems, procedures and safegaurds.
A concurrent auditor may not sit in
judgement of the decisions taken by a branch manager or an authorised
official. The concern was that this is beyond the scope of concurrent
auditor. However, the auditor will necessarily have to see whether the
transaction or decisions are within the policy parameters laid down by
the Head Office, they do not violate the instructions or policy prescriptions
of the RBI, and that they are with in the delegated authority and in compliance
with the terms and conditions for exercise of the delegated authority.In
every large branch, which has different divisions dealing with specific
activities, concurrent audit is a means to help the in-charge of the branch
to ensure on an ongoing basis that the different divisions function within
laid-down parameters and procedures.
Objective
The main objectives of concurrent audit
include that any violation of procedure is brought to light. Ascertaining
whether sanction for advances and expenditures is taken from competent
authority.Examining books of accounts records and registers to ensure
that they are maintained in accordance with the prescribed systems.Ensuring
compliance of laid down systems, procedures and policies.
Adequate measures are being taken in
advance to prevent future frauds, etc., to avoid difficulties, which may
arise.To check cash, securities,.etc., to ensure that they are in due
order and in agreement with books.Detection and arresting of any leakage
of income, if any. Evaluating the quality of customer services provided
and giving useful suggestions.
Assessing overall performance of the
branch while assessing productivity and profitability and to offer useful
comments on the basis of audit conducted. Restriction of matter discussed
on the spot with the help of concerned official. Reporting any inefficiency
in any operational level. Reporting any irregularity in working which
may result in financial or other loss to branch.
Reporting to appropriate levels of managment
for appropriate actions for remedial measures. Scrutinizing the completeness
of documents submitted for availing advances and other facilities and
physical checking of stocks and other assets at relevants places. To follow
up with authorities to ensure timely rectification of irregularities reported
which were not rectified on the spot. Verify prompt timely and regular
submission of the periodical and statutory returns.
