Concurrent Audit

Khandhar Mehta and Shah | Concurrent Audit 

Concurrent Audit

The activities of mutual fund houses, financial institutions, and especially banks and their risk profiles are growing complex day by day.

This is because of the increasing sophistication of various financial technology and the globalization and deregulation of financial services. As the banking services are developing with passing time, the risk factor is increasing as well. However, when it comes to the efficiency of companies and especially banks, it is calculated on their skills of management of risks. Therefore to manage risk and to gain control over operations, one must perform all the steps one might need to prevent the risk of fraud and error. The process of controlling is supplemented with an effective concurrent audit service like the one we offer at KMS. The concurrent audit of banks ensure that relevant regulatory requirements are met, and financial transactions are accurately processed.

What is a concurrent audit?

A concurrent audit or bank audit can be defined as a timely and systematic examination of the entity’s financial transactions to ensure accuracy, authenticity, and compliance with relevant regulatory requirements. Since the volume of transactions is very high, it is done on a regular basis. As concurrent auditing is contemporaneous with the transactions occurring, the process becomes a bit complex.

At KMS, we ensure effectiveness in our auditing process for which we reduce the time interval between auditing and its examination for speed of actions and efficient risk management.

Objectives of concurrent audit

On the one hand, where the objective of concurrent auditing is to ensure timely examination of the financial transactions; there are various other objectives as well which we keep in mind for carrying out concurrent audit such as:

Ensuring timeliness and accuracy in maintaining the company's or bank's books of accounts and periodical financial statements. ​

To improve the internal control system of the entity.

To improve transparency by implementing vouchers or evidence-based payments in the company or bank.

To ensure that the system, rules, regulations, policies, and procedures are followed properly by the company in line with the compliance requirements.

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Concurrent audit scope

The scope for conducting a concurrent audit of banks include

Review of internal controls to check if they are adequate, considering the nature and size of the business and pinpointing areas requiring more stringent controls.

Verification of KYC, AML, TDS documents as per RBI and Ministry of Finance guidelines

Substantive checking of high-risk areas like credit, regulatory compliance, revenue, non-performing assets, and forex.

Bringing into the light any violation of rules, regulations, and procedures or any hidden fraud happening in the company.

Identifying inefficiencies at operational levels and detecting sources of leakage of income, if any.

CONCURRENT AUDIT PROCESS

Benefits of concurrent auditing

Qualified professionals

Auditing is a very important process for any bank, business, or organization as it helps them in getting clarity and establishing transparency in the financial statements and accounts. At KMS, our professional and expert auditors provide the best concurrent auditing service in Ahmedabad.

Time saver

While auditing services are known for their long, complex, and time talking processes, concurrent auditing provides you with quick results, and our auditors provide faster results and point our errors in no time.

Better transparency

The basic objective and scope of concurrent auditing of banks are to bring transparency and infallibility in the books of accounts, which will further help in bringing efficiency and growth in the bank.

Differences between internal auditing and concurrent auditing

Internal auditing is conducted to upgrade the client's risk management practices and strategy. It enables management in strengthening internal controls and achieving operational efficiencies. Internal auditing also helps management in identifying, analyzing, and preventing errors and irregularities.

Concurrent auditing, on the other hand, is a systematic auditing process to ensure compliance, accuracy, and authenticity of the financial transactions. The main emphasis is on checking 100% transactions as they happen to detect irregularities immediately.

Why choose KMS for concurrent auditing?

KMS has decades of experience and a robust team of auditors who can help your bank with best-in-class bank audit services. The main mantra for our company is that client is the most important asset for us, and we would always keep their needs before anything and make sure we provide them with the services they deserve. We mainly depend on technology for carrying our services, and with the advanced technology in hand with the required skills and tools for bank auditing, we make the concurrent auditing process even faster.

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frequently asked questions(faqs)

According to guidelines set by RBI, the tenure of a concurrent auditor should not be more than 5 years continuously.
Yes, according to the rules and regulations set by RBI, banks need to get their accounts audited under the specific criteria.
The four types of opinions are qualified opinion, unqualified opinion, disclaimer of opinion, and adverse opinion.