Page 279 - DCOM204_AUDITING_THEORY

Unit 13: Audit of Banking and Insurance Company

(c) Whether the Auditor has used impersonal and objective language in his report Notes
without mentioning individuals by name except while reporting shortages or
misappropriations or dues outstanding against individuals.

(d) Whether it is evident that the Auditor has seen all the receipts vouchers and challans,
all books of accounts and all the statements or the final accounts and whether there
is any apparent omission on the part of the Auditor to look into any aspect of the
working of the society as can be gathered by a perusal of the final accounts and his
report.
(e) Whether the Auditor has given opportunity to the persons concerned to furnish
their versions regarding transactions which are adversely commented upon in the
audit report and obtained their comments regarding assessments made against
them

Self Assessment

Fill in the blanks:
4. The aims of the society should not be inconsistent with the principles of social justice, and
its bylaws not contrary to the provisions of the.................
5. With sanction of............................., Co-operative societies may also borrow from credit
agencies subject to the limits and conditions prescribed.
6. While the main object of a ................. is to earn profit, the object of a ................. is to render
service to its members.
7. Proper classification of assets and provisioning of cooperative institutions are based
on..........

13.3 Audit of General Insurance Business Companies

General Insurance sector is next only to the banking industry in terms of importance among the
economic barometers of the nation. While the banking industry is creating assets and consequently
national wealth, the insurance industry is ‘protecting’ such wealth to the tune of several millions of
rupees. The industry is also very unique in the sense that it thrives in selling promises and marketing
uncertainties and making good money in the process, cycling such money back in to the nation
building process. Cash-rich, again next only to banking, it is also the only industry that is global,
both by design and default, in its reach and perspectives and hence its numbers are also massive.
The industry, which was opened up for private sector participation with a defined limit of
foreign equity, after three decades of public sector monopoly, is in the process of rediscovering
itself. It has become the cynosure of all discerning eyes, with more than a dozen private companies
sponsored by the top industrial empires of the country teaming up with some of the best
international names, have sprung in the horizon to increase the size of the cake several fold and
then to take their due slices of it.

Task How audit procedure for banks are different from insurance company?
13.3.1 Accounts and Audit

The various stakeholders in the general insurance companies such as the Government (as the
owners of the PSU companies), Indian shareholders and the JV partners (in case of private

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