Issues covered in ICAI Journal

Ind AS is a reality now!
Further to this, MCA vide notification dated 16 February 2015 has issued the Companies (Indian Accounting Standards) Rules, 2015 which lays down the roadmap for implementation of Ind AS for certain class of companies along with 39 Ind AS being part of the annexure to these Rules.
Recently, on 30 March 2016, MCA has notified amendments to Ind AS including deferment of Ind AS 115, Revenue from Contracts with Customers and bringing out Ind AS 18, Revenue and Ind AS 11, Construction Contracts in place of Ind AS 115. Thus, at present there are 40 notified Ind AS.
What are IFRS? Statements of International Accounting Standards issued by the Board of the International Accounting Standards Committee (IASC) (1973-2001) are designated as International Accounting Standards (IAS).
However, the International Accounting Standards Board (IASB) announced in April 2001 that its Accounting Standards would be designated as ‘International Financial Reporting Standards’ (IFRS). IASB publishes its Standards in a series of pronouncements called International Financial Reporting Standards (IFRS). It also adopted the body of Standards issued by the Board of the IASC. Those pronouncements continue to be designated as IAS.
Presently, there are 25 IAS and 16 IFRS, 13 IFRIC Interpretations and 5 SIC Interpretations. Some of the Standards issued by IASC have since been withdrawn and replaced or superseded.
The Chartered Accountant Student July 2016 p 09

ARTICLES ON BANK AUDIT:5
AUDIT OF NPA with SPECIAL REFERENCE to PRUDENTIAL NORMS:
Please refer RBI Circular No.
http://www.rbi.org.in/scripts/BS_CircularIndexDisplay.aspx?Id=9009
TYPES OF NON-PERFORMING ASSETS:
As per master circular:

If principal and interest is NOT FULLY PAID within 90 days from the END OF THE QUARTER then the ADVANCE becomes NPA even though it is FULLY SECURED. Because it has LOST THE CHARACTER of GENERATING INCOME.
"ALL" the FACILITIES granted by a bank would be treated as NPA even if default is made in one account.
Example:
Sanctioned : CC and Term Loan:
If Term loan instalment and/or interest is not paid within 90 days when these become due, the WHOLE ADVANCE would be NPA.
March,2015/p 106

www.rbi.org.in

ARTICLES ON BANK AUDIT:4
More than 70 MASTER CIRCULARS have been issued by RBI on 1-4-2014 ( www.rbi.org.in )
AUDIT OF ADVANCES:
Annual Closing Guidelines of the Bank must be understood well.
Deviation from prevalent AS should be reported.
For details : refer ICAI Journal March,15/p98

rbi.org

ARTICLES ON BANK AUDIT: 2
CONDUCTING BANK BRANCH AUDIT IN CBS ENVIRONMENT :
1. Ask the branch if any SYSTEM AUDIT is conducted. If yes, the Audit Report thereof.
CRITICAL ISSUES IN CBS BRANCH AUDIT:
1. Final Accounts may not be representative of the books of accounts.
Special Case : ATM when cash is withdrawn after banking hours are over.
2. Borrower Health Classification
Don't believe BLINDLY on the report generated by the APPLICATION SOFTWARE of the BANK.
What is system skips for classification of NPA or what is incorrectly classified as NPA is of concern of Branch Auditor.

3. Anti Money Laundering (AML) Application and its accurate representation
(Ask if any SOFTWARE has been installed and working).
In suspicious activities of the branch, the Auditor must scrutinize the WHILE LISTING of cases because many banks generate NIL return by making MAPPING ERRORS intentionally.

March, 2015 / p 86

OTHER COMPREHENSIVE INCOME
New to Indian Accounting Scenario.
Although it is found in IFRS and US GAAP.
IND-AS takes due care thereof.
Basic Concept of OCI :
Revaluation in Fixed Asset is
increase in INCOME

and/or Decrease in Liabilities
is also an INCOME.
Such increase is without any active role of the conventional factors to generate income.
OCI is a separate component of Profit and Loss Account to make the picture clear of NATURE OF PROFITS.
In nutshell, OCI focuses on WEALTH CREATIVE OBJECTIVE whereas PROFIT & LOSS A/c focuses on ACCOUNTANT'S CONCEPT OF INCOME.
84/The Chartered Accountant/February,2015