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

Sharma & Co. are statutory auditors of Kaveri Finance Ltd, a deposit-accepting NBFC. During the audit they inquire whether the company has furnished to the Reserve Bank all statements, information and particulars relating to deposits received, as required under Chapter III-B of the RBI Act. They are satisfied that every required statement was furnished. What is the auditor's obligation under Section 45MA?

The auditor need not make a separate report to the Reserve Bank. Section 45MA(1) requires a report on aggregate deposits only when the auditor is not satisfied, after inquiry, that the NBFC furnished the required deposit statements, information or particulars to the Bank.

  1. AMake a separate report to the Reserve Bank giving the aggregate amount of deposits held
  2. BMake no separate report to the Reserve Bank, because the duty to report arises only where the auditor is not satisfied that the statements were furnishedCorrect
  3. CObtain the Reserve Bank's permission before issuing the audit report
  4. DReport the aggregate deposits only to the Registrar of Companies

Explanation

Section 45MA(1) requires the auditor to inquire whether the required statements on deposits were furnished to the Bank. A report giving the aggregate deposits is required except where the auditor is satisfied on inquiry that they were furnished. Since Sharma & Co. are satisfied, no separate report is required. Option 0 ignores the 'except where satisfied' carve-out.

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