ICAI joints hands with IBA to improve audit quality

Direct balance confirmation is a key audit evidence which is sufficient, appropriate and can be relied upon by the auditors in their responsibility to form an opinion on the financial position of an entity. This audit exercise can be time consuming and cumbersome.

Technology plays an important part in gathering audit evidence.In any balance sheet, bank balance as well as outstanding loan balances are important figures which the auditor needs to review.

Bank confirmations (both current account balances as well as loan balances) are vital for auditors to complete their obligations under various reporting requirements.

Currently auditors follow different practices, formats, procedures for obtaining confirmations from the banks. Auditors often find it difficult to get information from banks so they have to rely on third parties to provide confirmation. This raises questions on the credibility of information.

To streamline the auditing process, the ICAI in association with the Indian Banks Association (IBA) has approved a plan to develop and jointly control a common balance confirmation portal which promises high efficiency and reliability. The IBA has engaged with the RBI’s Institute for Development and Research in Banking Technology (IDRBT) and National E-Governance Services Limited to ensure the platform’s efficient and secure implementation.