## Audit Reports Issued by Statutory Central Auditors of Banks

Statutory Central Auditors must issue the main audit report PLUS the following additional reports:

### 1. Internal Controls over Financial Reporting (ICFR)

Report on adequacy and operating effectiveness of internal controls over financial reporting — applicable to banks registered as companies under the Companies Act, 2013 [S.143(3)(i)].

### 2. Long Form Audit Report (LFAR)

Detailed report covering areas specified by RBI. Goes beyond the standard audit report to include observations on internal control, loan portfolio quality, and operations.

### 3. SLR Compliance Report

Report on whether the bank has maintained the Statutory Liquidity Ratio as required by RBI.

### 4. Treasury Operations Report

Report on whether treasury operations have been conducted in accordance with RBI instructions.

### 5. IRACP Report

Report on whether Income Recognition, Asset Classification and Provisioning (IRACP) have been made as per RBI guidelines.

### 6. Serious Irregularities Report

Report on whether any serious irregularity was noticed requiring immediate action.

### 7. Ghosh & Jilani Committee Compliance Report

Ghosh Committee — recommendations relating to frauds and malpractices
Jilani Committee — recommendations relating to internal control and inspection/credit systems

### 8. Adverse Credit-Deposit Ratio Report

Report on instances of adverse credit-deposit ratio in rural areas.

Worked example

### Example 1

Exam question type: 'List the reports issued by Statutory Central Auditors of banks in addition to the main report.' Answer: LFAR, ICFR report, SLR compliance, Treasury operations, IRACP, Serious irregularities, Ghosh/Jilani compliance, adverse CD ratio — 8 reports.

### Example 2

Application: A bank classifies a sub-standard asset as standard. The auditor must flag this in the IRACP report because it relates to Asset Classification norms under RBI guidelines.

⚠️ Common exam mistakes

Treating the Long Form Audit Report (LFAR) as the main audit report — LFAR is a separate, additional report.
Forgetting that ICFR reporting under S.143(3)(i) applies only to banks structured as companies, not all banks.
Confusing Ghosh Committee (frauds/malpractices) with Jilani Committee (internal controls/credit system) — remember: Ghosh = Frauds, Jilani = Internal Controls.
Omitting the adverse credit-deposit ratio report — it is a commonly missed item in exam lists.

Reference:

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Types of Audit Reports in Bank Audit

Worked example

⚠️ Common exam mistakes