The Reserve Bank of India has modified the norms of concurrent audit of banks whereby the central bank has locked the term for concurrent auditors at three years.
Concurrent audit focuses on shortening the gap between a transaction and its independent verification.
“The age limit for retired staff engaged as concurrent auditors may be capped at 70 years. However, no concurrent auditor shall be allowed to continue with a branch or business unit for a period of more than three years,” said RBI.
The bank also said that the lenders’ internal audit department should design a reporting system for concurrent auditors with the approval of Audit Committee of the Board of Directors (ACB) or Local Management Committee (LMC).
The results of the concurrent auditors may be collected in a systematic format recommended by the bank. Minor irregularities pointed out by the concurrent auditors shall be rectified on the spot.
The major deficiencies or aberrations identified during audit should be soon brought to the notice of head office or controlling office of the concerned branch or business unit of the bank, it said.
“If external firms are appointed and any serious acts of omission or commission are noticed in their working, their appointments may be cancelled after giving them reasonable opportunity to be heard and the fact shall be reported to ACB/ LMC of the bank, RBI and ICAI,” said the notification.
RBI further that the bank should frame a policy for fixing accountability in cases of serious acts of omission or commission noticed in the working of a bank’s own staff or retired staff, working as concurrent auditors.