Page 269 - DCOM204_AUDITING_THEORY

Unit 13: Audit of Banking and Insurance Company

assurance about whether the financial statements are free from material misstatement. An Notes
audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The Balance Sheet and the Profit and Loss Account have been drawn up in Form ‘’A’’ and
‘’B’’ respectively of the Third Schedule to the Banking Regulation Act, 1949.
As required by the Banking Companies (Acquisition and Transfer of Undertakings) Act,
1970 and subject to the limitations of disclosures required therein and the limitations of
the audit indicated in Para (1) above, we report that:
1. We have obtained all the information and explanations, which to the best of our
knowledge and belief, were necessary for the purposes of our audit and have found
them to be satisfactory.
2. The transactions of the Bank, which have come to our notice, have been within the
powers of the Bank.
3. The returns received from the branches and offices of the Bank as supplemented
with the information furnished by the Management, have been found adequate for
the purpose of our audit.

In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply
with the applicable accounting standards.
Without qualifying our opinion, we draw attention to Note 9.2 of Schedule 18 to the
financial statements, which describes deferment of pension and gratuity liability of the
bank to the extent of ` 587.53 crore pursuant to the exemption granted by the Reserve Bank
of India to the Public Sector Banks from application of the provisions of Accounting
Standard (AS) 15, Employee Benefits, vide its circular no. DBOD.BPBC/80/21.04.018/2010-
11 dt.09.02.2011 on Reopening of Pension Option to Employees of Public Sector Banks and
Enhancement in Gratuity Limits - Prudential Regulatory Treatment.
In our opinion, as shown by books of bank, and to the best of our information and
according to the explanations given to us:
1. The Balance Sheet read together with Significant Accounting Policies and Notes
thereon is a full and fair Balance Sheet containing all the necessary particulars and is
properly drawn up so as to exhibit a true and fair view of state of affairs of the Bank
as at 31st March 2012 in conformity with accounting principles generally accepted in
India.
2. The Profit and Loss Account read with the Significant Accounting Policies and notes
thereon shows a true balance of the Profit for the year covered by the account in
conformity with accounting principles generally accepted in India; and
3. The Cash Flow Statement gives a true and fair view of the cash flows for the year
ended on that date.

Self Assessment

Fill in the blanks:

1. A banking company requires maintaining the books of account in accordance with section
209 of the Companies Act ...............

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