Audit Chapter 10

Asset Classification of Advances and Provisioning Norms

Audit of Advances – Objectives, Procedures, and Internal Controls

Audit of Income – RBI Materiality Directions and Reversal of Income

Audit of Operating Expenses

Drawing Power – Meaning, Calculation, and Bank Duties

Expenditure Audit — Audit of Interest Expense

Expenditure Audit — Audit of Provisions and Contingencies

Income Recognition — Renegotiations, Bills Purchased & Bills for Collection

Investment Income — Broken Period Interest and Amortisation of Premium

Modes of Security for Bank Advances — Mortgage, Pledge, Hypothecation, Assignment, Set-off, Lien

NPA Classification Based on Security Value & Agricultural Advances

NPA Income Recognition — Miscellaneous Points (Memorandum Account, Leased Assets, Partial Recovery, Out-take Finance)

Non-Performing Assets (NPA) — Definition and Identification

Special Cases in NPA — Government Guaranteed Advances and Account Regularisation Near Balance Sheet Date

Special Categories of Advances – Natural Calamities, Consortium, Staff

Types of Bank Advances — Funded vs Non-Funded