# Bank Auditor: Appointment, Remuneration & Reporting
## Eligibility, Qualifications & Disqualifications
Same as applicable to a Company Auditor under the Companies Act, 2013.
## Appointment of Auditor
| Type of Bank | Appointing Authority | Approval Required |
|---|---|---|
| Banking Company | At Annual General Meeting (AGM) of shareholders | RBI approval required |
| Nationalised Bank | Bank concerned, acting through its Board of Directors (BOD) | RBI approval required |
| Regional Rural Banks (RRBs) | Bank concerned | Approval of Central Government (CG) |
## Remuneration of Auditor
- Banking Company: Fixed as per the Companies Act, 2013.
- Nationalised Banks & SBI: Fixed by RBI in consultation with CG.
## Auditor's Report — Nationalised Bank
In the case of a nationalised bank, the auditor must report to the Central Government stating:
1. Whether, in his opinion, FS present a true and fair view of the affairs of the bank; whether the explanation/information called for has been given and is satisfactory.
2. Whether or not transactions of the bank have been made within the powers of that bank.
3. Whether or not returns received from branches have been found adequate for audit.
4. Any other matter which he considers should be brought to the notice of CG.
(The report of auditors of SBI is also to be made to CG, and is almost identical.)
## Long Form Audit Report (LFAR)
- Besides the audit report, auditors also have to file the LFAR.
- Matters to be dealt with in LFAR have been specified by RBI.
- SCAs must submit LFAR to banks latest by 30th June every year.
## Reporting to RBI - Fraud-Related Reporting
RBI's Circular (on Committee for Legal Aspects of Bank Frauds, applicable to all scheduled commercial banks excluding RRBs) regarding the liability of the accounting and auditing profession provides:
> "If the accounting professional, whether in course of internal or external audit, feels anything susceptible to be fraud, he should refer the matter to the regulator. Any deliberate (known) failure on part of the auditor should render himself liable for action."
SA 250 (Consideration of Laws and Regulations in an Audit of FS) further states that the duty of confidentiality is over-ridden by statute, law, or courts.
## Format of Audit Report — Important Disclosure
The auditor must ensure that:
- Information relating to number of unaudited branches is given.
- Quantification of advances, deposits, interest income and interest expense for such unaudited branches has been disclosed in the audit report.
- CARO 2020 is NOT applicable to banks.