The Hindu Business Line : ICAI revises bank audit report format

COME April 1, 2006, the audit reports of nationalised banks and banking companies may turn more informative for users of financial statements of such banks.

All the audit reports of nationalised banks issued on or after this date would have to necessarily include the auditor's opinion on the banks' compliance with applicable accounting standards.

The Central Council of the Institute of Chartered Accountants of India (ICAI) has recently approved a revision to this effect in the format of the report furnished by auditors of nationalised banks.

The Reserve Bank of India had prescribed the format in which the auditor's report of nationalised banks should be prepared and furnished by them.

Now, this format is being improved upon by mandating additional reporting on the auditor's opinion on whether the balance sheet, profit and loss account and cash flow statement have been prepared as per the accounting principles generally accepted in India and comply with the accounting standards, say ICAI officials.

A similar revision has also been made to the audit report of banking companies. Accepting the recommendations of the Auditing and Assurance Standards Board, the central council has now revised the format of the audit report of banking companies to include the opinion of the auditor on the aspect whether the balance sheet and P&L account read with notes thereon comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

Since banking companies are registered under the Companies Act 1956, the provisions of the Companies Act are applicable to them to the extent they are not inconsistent with the requirements of the Banking Regulation Act 1949.

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