Bank Branch Audit under CBS Environment - Parameters affecting NPA Identification
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Core Banking System - CBS
A composite system / software which handles Transactions, Customer Relations, Regulatory compliances, MIS / Reports request is the need of an Hour.
Core Banking Systems provide the solution for the same. There are various Core Banking Software's available in the market.
Role and Responsibilities of the Bank
Considering the importance of IT systems in the preparation and presentation of financial statement, it is imperative that the bank should share detailed information about the key aspects relating to IT environment of the bank with the central / branch auditor at regular intervals:
Overall IT policy, structure and environment of the bank’s IT system and changes/developments, if any, thereto. The bank is also required to put in place a cyber security framework as mandated by RBI vide circular no. RBI/2015-16/418 DBS.CO/CSITE/BC.11/33.01.001/2015-16, dated June 2, 2016 on “Cyber Security Framework in banks”.
Data processing and data interface between various systems.
A composite system / software which handles Transactions, Customer Relations, Regulatory compliances, MIS / Reports request is the need of an Hour.
Core Banking Systems provide the solution for the same. There are various Core Banking Software's available in the market.
Role and Responsibilities of the Bank
Considering the importance of IT systems in the preparation and presentation of financial statement, it is imperative that the bank should share detailed information about the key aspects relating to IT environment of the bank with the central / branch auditor at regular intervals:
Overall IT policy, structure and environment of the bank’s IT system and changes/developments, if any, thereto. The bank is also required to put in place a cyber security framework as mandated by RBI vide circular no. RBI/2015-16/418 DBS.CO/CSITE/BC.11/33.01.001/2015-16, dated June 2, 2016 on “Cyber Security Framework in banks”.
Data processing and data interface between various systems.
Data integrity and data security.
Business Continuity Plans and Disaster Recovery Plans.
Accounting manual and critical accounting entries (including month-end and year-end) and the processes and involvement of IT systems.
Controls over key aspects, such as, account codes and mapping thereof, use of various account heads including other assets and other liabilities, asset classification, income recognition, expense booking, overdue identification, month-end and year-end procedures, valuation and revaluation of various items of the financial statements, KYC, AML, etc.
Role and Responsibilities of Branch Auditors
Based on the guidance and information received from the SCA / bank, the branch auditors need to ensure the following:
Based on the guidance and information received from the SCA / bank, the branch auditors need to ensure the following:
Branch auditors’ roles and responsibilities are clearly understood and implemented.
To the extent possible, data analysis tools are used for better and effective audit.
Test of controls and substantive checking of sample transactions are carried out at the branch level and, where considered necessary, the results are shared with the SCAs.
Data review and analysis through CBS is carried out.
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