Things to check when you are on a Bank Audit with Check list

Things to check when you are on a Bank Audit. When you are on a Bank Audit, you need to be really careful about everything! Because even the slightest mistake

CA Ridhi Dhoot

Bank Audit

Things to check when you are on a Bank Audit. When you are on a Bank Audit, you need to be really careful about everything! Because even the slightest mistake can result into a heavy loss for the bank. Here’s a list of the things you must consider when on a bank audit.

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Things to check when you are on a Bank Audit


Know Your Customer. This is the basic & the most important thing to check. Whether the customer is a genuine person or not can be made sure by doing proper KYC. Proper ID & address proofs need to be collected for this purpose. Also, they should be self attested by the customer.

Surprise Cash Verification:

If you are doing the concurrent audit of a bank, you need to make sure that there is no cash embezzlement going on. For sample test verification of the same, you should go for surprise cash verification & make sure that the physical cash tallies with the accounted cash. Also, the working of various cash counting machines should be checked frequently.

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Study of Exceptional Transactions:

Most of the Bank’s system provide a report of exceptional transactions. In depth study of the same should be undertaken by the auditor.

Charging penal interest:

Be it non – submission of stock statements or the account is continuously overdrawn or say, there are no transactions in the account, penalty interest should be charged regularly as per the Bank’s circular. Thus, you should read the Bank’s circular thoroughly.

TDS/ Service Tax Compliances:

Checking the compliances of various other acts is also an integral part of Bank Audits. You need to make sure that bank has regularly deducted TDS of its various customers & deposited the same within the specified time limit with the CBDT. Also, bank has charged Service Tax on the various services provided by it & filed its returns regularly.

Do regular Unit Visit:

Make sure you make a frequent visit to the various loan holders of the bank at regular intervals. This will help you to assess the real working situation & financial standing of the enterprise.

Proper documentation at the time of fresh sanction/ renewal:

Also, be careful & attentive enough to regularly check the various loans sanctioned by the branch. Read the sanction letter carefully & make sure that all the documents prescribed in the sanction letter have been taken by the branch.

Proper maintenance of stationery:

Also, stationery verification should be done at regular intervals. This will make sure that there is no unauthorized issue of demand drafts, cheque books, etc.

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Checking of previous report compliances:

Whether all the queries or lacunas mentioned in the previous reports have been complied with, whether all the penal interest & other forms of revenue leakage as pointed out in the earlier reports has been efficiently collected, needs to be ensured at this step.

Listing the accounts pending renewal:

If there are any accounts which need to be renewed & the date of renewal as mentioned in the sanction letter has passed or is coming closer, you should make sure you bring this to the attention of the proper authority.

Studying the sensitive accounts:

Make sure you give a careful look into the sensitive accounts of the bank.


Vouching should be done on a sampling basis of at least 2-3 days each month to understand the working of the bank in a better way.

Apart from the above, attention should also be given to each & every thing happening in the bank, as sometimes the smallest ignorance can lead to something serious.

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