ICAI to meet FM on bank branch audit in September

The Institute of Chartered Accountants of India (ICAI) will meet Union Finance Minister P Chidambaram on retaining the current advance limit of bank branches for independent audit.

"We will meet the finance minister and make a representation to retain the current Rs 6 crore limit of advance by a branch for an independent audit on bank branch audit among some other issues," ICAI President Jaydeep N Shah said here today on the sidelines of institute's regional conference.

A committee comprising officials of the RBI and the Ministry of Finance had proposed increasing the minimum advance limit for the PSU bank branches eligible for independent audits from Rs 6 crore to Rs 20 crore from 2012-13.

Shah said currently around 85 per cent of the bank branches come under the independent audit ambit.

"If the limit is increased to Rs 20 crore, then huge number of branches come out of the audit," he said. Since 2006 to FY2011, the statutory audit limit was Rs 3 crore and in 2011-12 the limit was raised to Rs 6 crore. When asked about concern raised about expenditure by PSU banks for the independent audit, Shah said of the total bank advance of Rs 44 lakh crore the total audit fees is between Rs 300 and 400 crore. Meanwhile, Shah said Government Accounting Standard Advisory Board in which ICAI is also a member was working satisfactorily in preparing accounting standards to switch to double entry and accrual system of accounting for all central and state government accounting.