With major frauds being reported by banks in the recent past, including the ₹13,000-crore Letter of Undertaking fraud at Punjab National Bank, the Reserve Bank of India said there is a need for improvement in the audit function and its governance.
The central bank wants the various types of audits undertaken by banks, such as statutory audit, risk-based internal audit (RBIA), concurrent audit, information systems (IS) audit and special audits to be tightened.
Concurrent audit
The RBI said concurrent audit has to be carried out on real-time or near real-time basis, and is expected to set the tone for subsequent internal audits that happen with a time lag. Exception reports, even of a routine nature, are to be seen in detail on an ongoing basis.
Audit trail should be…
