How audits are done at public banks

The banking sector in India is one of the largest in the world as far as its extensive branch network is concerned. The role of the banking sector in the overall growth and development of the Indian economy is also quite significant and laudable. Therefore, banks function under the tight supervisory and regulatory directions of the Reserve Bank of India to minimize the internal and external risks that face the banking industry. Accordingly, banks also have extensive systems for internal control to comply with RBI directions, which also protects them from various risks. For a safe and sound banking sector, one of the most important factors is reliable financial information, supported by audits performed per the established performance benchmarks. Audit of banks, however, involves certain complexities which make the task of the auditors quite onerous. The most significant of them are volume and complexity of transactions, geographical spread, client portfolio, a wide variety of products and services offered, extensive use of technology, and above all, high sensitivity to the slightest of changes in the social, economic, or political environment. Indian banks continue to build on their strengths with good quality audits serving as the backbone of the strong banking system in place today. Auditing practices are the basis of the strong banking system in terms of quality of assets and capital adequacy, and clean, strong, and transparent balance sheet of the banking companies. Accordingly, the ICAI has come out with a number of publications to enrich the auditor and keep them aware of norms from time to time.