FAQs on Professional Ethics for Members of ICAI Pertaining to Bank Assignments
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 11 April, 2023
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To guide its member, the Ethical Standard Board (ESB) of The Institute of Chartered Accountants of India, has issued “FAQs relating to professional ethics of members pertaining to Bank Assignments”. This document has been drafted keeping in mind the professional and ethical requirements applicable to members of ICAI. The story discusses and answers various FAQs to avoid conflict with independence and interest between varied roles played by members of ICAI to bank assignments. The main conclusion drawn from the discussion is:
1. The concurrent auditor/Internal Auditor may undertake the assignment of certification for a Bank branch only if the certificates are addressed to the Bank’s management i.e. not addressed to the statutory auditor/a regulator/without being addressed to anyone in particular.
2. The Concurrent Auditor/Internal Auditor can neither perform a Statutory Audit of the financial statements of a Bank Branch nor certify them as audited financial statements. The members are required to take note of the above and comply accordingly.
Certain FAQs are discussed below to provide a glimpse of the document:
FAQ 1. Can a Chartered Accountancy firm undertake an audit of a branch of a bank, even if one of its partners has obtained a loan from another branch of the same bank?
According to professional ethics, a Chartered Accountancy firm should not accept the audit of a branch of a bank if any of its partners have taken a loan from any branch of the same bank. This is because it could potentially compromise the independence of the firm and put them in a position of conflict of interest.
FAQ 2. Is it ethical for the Statutory Auditor of one branch of a bank to accept the Concurrent Audit assignment of a different branch of the same bank?
To uphold the principle of strict independence, it is not allowed for the Statutory Auditor of one branch of a bank to accept the Concurrent Audit assignment of a different branch of the same bank.
FAQ 3. Is it ethical for the Internal Auditor of a bank to provide consultancy services to the same bank?
It is permissible for a member to undertake consultancy work for a bank, provided that it is done in conjunction with their role as the Internal Auditor of the same bank.
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