A financial institution necessitates ongoing transaction monitoring, particularly in the case of entities such as banks, where a robust and uninterrupted review process is essential. This underscores the importance of conducting a ๐ฐ๐ผ๐ป๐ฐ๐๐ฟ๐ฟ๐ฒ๐ป๐ ๐ฎ๐๐ฑ๐ถ๐.
True to its name, a concurrent audit occurs concurrently with transactions happening in parallel. In contrast to most audits performed after transactions, concurrent audits are conducted in real-time as transactions unfold. This proactive approach serves as an early warning system, facilitating the timely identification of irregularities and shortcomings.
The concurrent audit encompasses every transaction within the bank, making it essential to have a grasp of the bank’s operational procedures to conduct this audit effectively. Banking operations encompass a wide range of functions, including but not limited to:
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Acceptance of deposits
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Loans and advances
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Cash management
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Safety Lockers
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Forex
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Bill Payment
๐๐ฐ๐ฐ๐ฒ๐ฝ๐๐ฎ๐ป๐ฐ๐ฒ ๐ผ๐ณ ๐ฑ๐ฒ๐ฝ๐ผ๐๐ถ๐๐:
The deposits vary depending on the holder and the purpose of the account. Nevertheless, the process of Acceptance of deposits can be summed up as follows:-
โบCollection of details
โบKYC and AML norms compliance
โบCreation of an account in the Core Banking System (CBS)
๐๐ผ๐ฎ๐ป๐ ๐ฎ๐ป๐ฑ ๐ฎ๐ฑ๐๐ฎ๐ป๐ฐ๐ฒ๐:
There are several loans and advances that a bank offers. However, the process for disbursement remains more or less the same. The process for disbursement of a loan can be summed up as the following transactions:
โบBuilding a relationship with the customer
โบCollection of all requisite documents
โบChecking the credibility of the customer
โบDisbursing the loan and monitoring the loan
๐๐ฎ๐๐ต ๐บ๐ฎ๐ป๐ฎ๐ด๐ฒ๐บ๐ฒ๐ป๐:
Maintaining a substantial cash reserve could lead to interest losses as the bank generates interest from the rupees it lends. Nevertheless, banks must maintain an adequate cash reserve to support their ATMs. Therefore, the bank must strike a balance.
๐ ๐จ๐ซ๐๐ฑ:
For forex operations of a bank, the auditor must ensure the following checks:
โบRate of foreign exchange on the transaction date and correct entry in books
โบAdherence to RBI norms relating to Forex
โบCorrect valuation of Forex held in hand at the time of the audit.
๐๐ข๐ฅ๐ฅ ๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ๐ฌ:
This service, provided by banks as an additional offering, allows customers to make payments for public utilities through the bank. The auditor’s responsibilities include:
โบ Verifying whether standing instructions from customers have been received and ensuring that they are recorded in the CBS system to facilitate automatic payments.
โบEnsuring that the utility accounts are properly reconciled.
The primary goal of concurrent auditing is to minimize the time gap between a transaction taking place and its review. A concurrent audit report encompasses all transactions, making it the bank’s secondary line of defense.