Updated Guidance for Auditing Banks: AASB's 2025 Edition Overview

Introduction

The Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) has released an Exposure Draft for the "Guidance Note on Audit of Banks" (2025 Edition). This document aims to provide auditors with updated guidance and procedures for conducting statutory audits of banks and their branches.

Overview of the Exposure Draft

Each year, the AASB publishes a revised edition of the "Guidance Note on Audit of Banks" to equip auditors with the latest tools and procedures needed for effective auditing. The 2025 Edition features essential updates and practices relevant to the banking sector.

Key Updates in the 2025 Edition

• Fraud Detection:

  • Improved procedures for identifying red flags in loan portfolios and transaction patterns.

• GST Compliance:

  • Comprehensive guidelines for auditing GST implementation in bank branches.

• Foreign Exchange Transactions:

  • Established procedures for verifying forex transactions and ensuring compliance with the Reserve Bank of India (RBI) regulations under the Foreign Exchange Management Act (FEMA).

• Regulatory Updates:

  • Integration of revised Basel III norms, RBI's prudential frameworks for asset classification, along with updates on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements.

Conclusion

Your feedback is crucial in refining the "Guidance Note on Audit of Banks" (2025 Edition). Engaging with this draft will help ensure that auditing standards evolve in line with the changing banking landscape, ultimately enhancing the quality and reliability of audits.