LONG FORM AUDIT REPORT- Ready Reckoner
Mere give the main audit report and bunch of certificates to the Bank management, RBI and their stake holders are not enough in the current era of CBS banking. To give detailed comments/reports on procedures, practices and internal controls over the business affairs of any bank or their branches, a separate report is to be submitted by the statutory auditor yearly.
To curb the fraud cases and establish strong internal control, Reserve Bank of India (RBI) first time advised to banks (including private banks and foreign banks) to get the LFAR from the statutory auditor in year 1985. Till date, in line with business environment and technological changes, the LFAR format is constantly amended. Last revisions in the format of such report were made in year 2003 which was made effective from 31st March, 2003.
LFAR- a basic layout
Statutory auditors of any bank are divided in two categories:
1. Statutory Central Auditor (SCA)
2. Statutory Branch Auditor (SBA)
On the above basis and different work profile, LFARs are drafted in 2 approaches. Initially branch auditors have to submit the LFAR in the specified format made available for bank branches. The entire branch LFARs required to be submitted to the bank H.O. and statutory central auditors (SCA) as well.
Subsequently, SCA go through these LFARs thoroughly and prepare a consolidated long form audit report of the Bank as a whole.
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