Jaagrata Foundation, the Kochi-based professional forum, has come out against the move of PSU banks to upset the present system of branch audit.
The forum, which is constituted by experts in the field of law, finance and auditing, said the present system of selection of branch auditors by bank managements from a panel of auditors recommended by the RBI is an effective system that ensures reliability and credibility to the annual results published by PSU banks.
However, there is an organised attempt by bank managements to upset the existing system through imposing unreasonable and impracticable conditions on the auditors. Jaagrata Foundation alleged that such a move is intended towards branding the branch auditors and branch audit system as ineffective and to make way for a centralised audit that may reduce the quality of the audit process and the creditability of the annual results.
Being financial institutions which deal with public funds, a move like this would have a serious impact on the credibility and transparency of annual results. There are demands from the auditing fraternity that the Reserve Bank, Central and State governments and other concerned authorities should look into the matter urgently, a press release said.
Further, there is also a compulsion by the management on the auditors to complete the audit work and submit their reports within four days even though the required information is not yet ready at most of the branches subject to audit. A hasty and the expeditious process would make a mockery of the auditing function since the examination of financial information and appropriate classification of advances requires sufficient time and care.