CBS 2009 (Compatibility Mode)

AUDIT THROUGH CORE BANKING SOLUTIONS
BY MITIL CHOKSHI CHOKSHI & CHOKSHI
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CORE BANKING SOLUTION (CBS)
CONTENTS
EVOLUTION AUDIT APPROACH SECURITY CONTROLS OPERATIONAL CONTROLS USE OF EXCEL AS AN AUDIT TOOL CBS & LFAR OTHER ISSUES MANUAL VERIFICATION EXAMPLES
EVOLUTION
ANUAL ANKING
BRANCH CBS BRANCH BANKING, COMPUTERISATION INTERNET BANKING E
AUDIT APPROACH (EMPHASIS ON INPUT & INTERFACE CONTROLS)
INTER CORE RECO ACCOUNTS SHOULD BE ZERO
CLASSIFICATION & PROVISION FOR ADVANCES & RELATED DISCLOSURES
BRANCH LANCE SHEET
CONSOLIDATED BALANCE SHEET

MEMORANDUM OF CHANGES
FIRMATION OF ANCH LEVEL S CONTROLS
TFU/ TREASURY BALANCE SHEET
SECURITY CONTROLS
PHYSICAL CONTROLS
ENVIRONMENTAL CONTROLS
APPLICATION CONTROLS
DATABASE CONTROLS
OPERATING SYSTEMS CONTROLS
NETWORK CONTROLS
OPERATIONAL CONTROLS
BCP/ DRP
Are Controls Really Important?
OPERATIONAL CONTROLS
ACCESS CONTROLS SEGREGATION OF DUTIES, AUTHORISATION MATRIX ETC.
INPUT CONTROLS MAKER CHECKER MAKER
VALIDATION CONTROLS CHEQUE NUMBER, ACCOUNT NUMBER ETC.
PROCESSING CONTROLS UPDATION /APPLICATION OF CHARGES, INTEREST, ETC.
MONITORING CONTROLS REVIEW OF EXCEPTION REPORTS, GL&PL, ETC.
USE OF EXCEL AS AN AUDIT TOOL
FOLLOWING REPORTS CAN BE OBTAINED IN EXCEL FROM HO MIS DIVISION FOR ANALYSIS PURPOSE (ILLUSTRATIVE LIST)
CCOD ACCOUNTS BALANCE MORE THAN DP
ADDITIONS IN NPA DURING THE YEAR
DATE OF LAST CREDIT IN CCOD ACCOUNTS OPERATIONS I CCOD
DATE OF NPA, CLASSIFICATION & PROVISION REPORT
REPORT FOR UNDER INSURANCE
REPORT OF EXPIRED INSURANCE POLICIES
CBS & LFAR
ASH
AR POINT : CLAUSE :1 [a]
SH BALANCE WITHIN THE RETENTION LIMIT & REPORTING OF EXC LANCES
S REPORTS :
STEM GENERATED EXCESS CASH OVER LIMIT
ONTROLS:
YSICAL CUSTODY & INSURANCE
AR POINT : CLAUSE :1 [a]
RIFCATION OF PHYSICAL CASH
S REPORTS :
STEM GENERATED CASH CONTROL REPORT WITH OPENING & CLOS SH BALANCES, DENOMINATIONWISE
ONTROLS:
EQUENCY OF SURPRISE VERIFICATION BY BANK OFFICIALS
CBS & LFAR contd..
DVANCES
AR POINT : (5 [b]) SBURSEMENT S REPORTS : EATION OF MASTERS (i.e. OPENING OF ACCOUNTS AS PER DETAILS NCTION LETTER) ONTROLS: AKER CHECKER CONTROLS LIDATION CONTROLS (e.g. ROI SHOULD BE LINKED TO PLR)
AR POINT : (5 [d] i) VIEW / MONITORING/ SUPERVISION OBTAINING ACKNOWLEDGMENT SUPERVISION: BTS S REPORTS : PORT WITH ACCOUNTS WHERE AOD IS UPDATED DURING THE YEAR ONTROLS: PUT CONTROLS RIFICATION WITH PHYSICAL DOCUMENTS
CBS & LFAR contd..
DVANCES
AR POINT : (5 [d])
VIEW / MONITORING/ SUPERVISION VALUE OF SECURITY SUPERVISION:
S REPORTS : PORT WITH OUTSTANDING BALANCE, SECURITY VALUE AND DATE OF LUATION ONTROLS:
RIFICATION OF INPUT CONTROLS FOR CREATION/ UPDATION COUNT MASTER
ANUAL VERIFICATION OF ADVANCES WITH MORE THAN ONE SECURITY
AR POINT : (5 [d])
VIEW / MONITORING/ SUPERVISION FREQUENT OVERDRAWING SUPERVISION:
S REPORTS :
COUNTS WITH OVERDRAWING FOR MORE THAN THREE MONTH
ONTROLS:
THORISATION CONTROLS, PROCESS OF REVIEW OF EXCEPTION REPOR
CBS & LFAR contd..
DVANCES
AR POINT : (5 [d]) VIEW / MONITORING/ SUPERVISION OBTAINING AOD SUPERVISION: S REPORTS : PORT WITH ACCOUNTS WHERE AOD NOT UPDATED ONTROLS: ASSIFICATION & EVIDENCE OF FOLLOWUP WITH BORROWER
AR POINT : (5 [d]) VIEW / MONITORING/ SUPERVISION RECEIPT OF STOCK AND BOOK D SUPERVISION: ATEMENTS S REPORTS : PORT WITH ACCOUNTS WHERE STOCK AND BOOK DEBT STATEME E NOT RECEIVED/ DELAY IN RECEIPT OF THE SAME ONTROLS: RIFICATION OF INBUILT CONTROLS IN THE CBS DENYING UPDATION WITH EARLIER DATE TO CONVERSION OF DP TO ZERO COUNT MASTER FOR PENAL INTEREST
CBS & LFAR contd..
DVANCES
AR POINT : (5 [d]) VIEW / MONITORING/ SUPERVISION INSURANCE OF SECURITY SUPERVISION: S REPORTS : LUE OF SECURITY MORE THAN INSURED AMOUNT PIRED INSURANCE POLICIES ONTROLS: PUT CONTROLS OCESS FOR REVIEW OF EXCEPTION REPORTS
AR POINT : (5 [d])
VIEW / MONITORING/ SUPERVISION CLASSIFICATION OF NPA SUPERVISION: S REPORTS : COUNT NO., O/S BALANCE, DATE OF NPA, CLASSIFICATION, PROVISI LUE OF SECURITY, DATE OF VALUATION, URIPY & INCA ONTROLS: RIFICATION OF MIGRATION & INPUT CONTROLS IF BANK HAS SEPAR PLICATION FOR CLASSIFICATION AND PROVISIONING OF NPA ANUAL VERIFICATION ON TEST BASIS
CBS & LFAR contd..
DVANCES
AR POINT : (5 [d]) VIEW / MONITORING/ SUPERVISION CLASSIFICATION OF NPA SUPERVISION: S REPORTS : COUNTS UPGRADED DURING THE YEAR COUNTS OVERDUE BUT REGULARISED ONTROLS: THORISATION MATRIX, INPUT CONTROLS FOR RECOVERY QUIRE WHETHER INBUILT CONTROLS ARE AVAILABLE IN CBS COVER CHARGES, URIPY, INCA BEFORE PRINCIPAL
AR POINT : (5 [e]) ARANTEES AND LETTERS OF CREDIT S REPORTS : VOKED GURANTEES, DEVOLVED LCS, EXPIRED GUARANTEES ONTROLS: PUT CONTROLS WHILE PAYMENT, OCESS OF REVIEW OF EXCEPTION REPORTS ME LIMIT FOR REVERSAL OF EXPIRED GUARANTEES
CBS & LFAR contd..
POSITS AR POINT : (1) W ACCOUNTS OPENED S REPORTS : COUNTS OPENED DURING THE YEAR ONTROLS: RIFICATION OF PARAMETERS DEFINED FOR THE MASTER RECORD E ACCOUNT HOLDER, PERMISSION TO CHANGE PARAMETERS BASED THORISATION MATRIX,
AR POINT : (1) IDELINES WITH RESPECT TO CONDUCT OPERATIVE ACCOUNTS S REPORTS : TIVATION OF NON OPERATING ACCOUNTS ONTROLS: OCESS OF REVIEW OF EXCEPTION REPORTS THORISATION MATRIX
AND
OPERATIONS
CBS & LFAR contd..
OFIT & LOSS AR POINT : (1) SCREPANCIES IN INTEREST/DISCOUNT AND FOR TIMELY ADJUSTM EREOF IN ACCORDANCE WITH THE GUIDELINES LAID DOWN S REPORTS : I UPDATION DURING THE YEAR ONTROLS: PUT CONTROLS AND VERIFICATION WITH CIRCULARS ISSUED
SCELLANEOUS AR POINT : (6 [ii]) CORDS OF ALL THE FIXED ASSETS ACQUIRED AND HELD, IRRESPECT VALUE S REPORTS : s OF DEAD STOCK ONTROLS: CONCILIATION BETWEEN GL & DEADSTOCK REGISTER
OTHER ISSUES
SUES: IRECT ACCESS TO DATABASE UDIT STEPS: ST OF USERS HAVING DIRECT ACCESS TO DATABASE, REVIEW CCESS LOGS & TRANSACTION LOGS, IN BUILT CONTROLS ESTRICT CHANGES IN LOGS.
SUES: ACK OF AWARENESS (INPUT & PROCESSING) UDIT STEPS: EVIWEW OF PERIODIC TRAINING ATTENDED BY BRANCH STAFF
MANUAL VERIFICATION..
Assets Balances with Reserve Bank of India, State Bank of India and other Banks Money-at-call and short notice Investments Advances Credit appraisal Advances Documentation Other assets Stationery & Stamps LIABILITIES Contingent Liabilities (other than LCs , BGs, etc.) PROFIT AND LOSS ACCOUNT Compliance with the Income Recognition norms prescribed by RBI Divergent Trends In Major Items of Income and Expenditure GENERAL MISCELLANEOUS
ause No. Details
a.
c.
Auditors : The Balancing Act
THANK YOU
THANK YOU
MITIL CHOKSHI

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AUDIT THROUGH CORE BANKING SOLUTIONS

BY MITIL CHOKSHI CHOKSHI & CHOKSHI

CORE BANKING SOLUTION (CBS)

BRANCH CBS BRANCH BANKING, COMPUTERISATION INTERNET BANKING E

AUDIT APPROACH (EMPHASIS ON INPUT & INTERFACE CONTROLS)

INTER CORE RECO ACCOUNTS SHOULD BE ZERO

CLASSIFICATION & PROVISION FOR ADVANCES & RELATED DISCLOSURES

BRANCH LANCE SHEET

CONSOLIDATED BALANCE SHEET

FIRMATION OF ANCH LEVEL S CONTROLS

TFU/ TREASURY BALANCE SHEET

OPERATING SYSTEMS CONTROLS

Are Controls Really Important?

ACCESS CONTROLS SEGREGATION OF DUTIES, AUTHORISATION MATRIX ETC.

INPUT CONTROLS MAKER CHECKER MAKER

VALIDATION CONTROLS CHEQUE NUMBER, ACCOUNT NUMBER ETC.

PROCESSING CONTROLS UPDATION /APPLICATION OF CHARGES, INTEREST, ETC.

MONITORING CONTROLS REVIEW OF EXCEPTION REPORTS, GL&PL, ETC.

USE OF EXCEL AS AN AUDIT TOOL

CCOD ACCOUNTS BALANCE MORE THAN DP

ADDITIONS IN NPA DURING THE YEAR

DATE OF LAST CREDIT IN CCOD ACCOUNTS OPERATIONS I CCOD

DATE OF NPA, CLASSIFICATION & PROVISION REPORT

REPORT FOR UNDER INSURANCE

REPORT OF EXPIRED INSURANCE POLICIES

CBS & LFAR

AR POINT : CLAUSE :1 [a]

SH BALANCE WITHIN THE RETENTION LIMIT & REPORTING OF EXC LANCES

STEM GENERATED EXCESS CASH OVER LIMIT

YSICAL CUSTODY & INSURANCE

AR POINT : CLAUSE :1 [a]

RIFCATION OF PHYSICAL CASH

EQUENCY OF SURPRISE VERIFICATION BY BANK OFFICIALS

CBS & LFAR contd..

CBS & LFAR contd..

VIEW / MONITORING/ SUPERVISION VALUE OF SECURITY SUPERVISION:

RIFICATION OF INPUT CONTROLS FOR CREATION/ UPDATION COUNT MASTER

ANUAL VERIFICATION OF ADVANCES WITH MORE THAN ONE SECURITY

VIEW / MONITORING/ SUPERVISION FREQUENT OVERDRAWING SUPERVISION:

COUNTS WITH OVERDRAWING FOR MORE THAN THREE MONTH

THORISATION CONTROLS, PROCESS OF REVIEW OF EXCEPTION REPOR

CBS & LFAR contd..

CBS & LFAR contd..

CBS & LFAR contd..

CBS & LFAR contd..

CBS & LFAR contd..

ause No. Details

Auditors : The Balancing Act

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