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CA Final · Advanced Auditing, Assurance and Professional Ethics · Special Features of Audit of Banks & Non-Banking Financial Companies

Having made a report to the RBI about deposit statements not furnished by Sagar Capital Ltd, an NBFC, the auditor CA Rohan is preparing his audit report to the members on the financial statements. Which conclusion is correct under the RBI Act, 1934?

CA Rohan must include in his audit report to members the contents of the report he has made or intends to make to the RBI. Section 45MA(2) requires this inclusion expressly. A mere mention that a report exists, or omission on grounds of confidentiality, would not satisfy the requirement.

  1. AHe should include in his report to members the contents of the report he has made or intends to make to the RBICorrect
  2. BThe RBI report is confidential, so he must leave it out of the members' report
  3. CHe should include only a note saying a report to RBI exists, without its contents
  4. DHe needs prior RBI permission before including any such content

Explanation

Section 45MA(2) says that where the auditor has made or intends to make a report to the Bank under sub-section (1), he shall include the contents of that report in his audit report. Leaving it out, or only referring to its existence, falls short. No RBI permission is required for this inclusion.

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