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

Sundaram Finance Services Ltd, a deposit-taking NBFC, is audited by CA Meera. During the audit she inquires whether the company has furnished to the RBI the statements, information and particulars about deposits that the RBI Act requires. She finds that the company has not furnished them. What is the auditor's duty under Section 45MA of the RBI Act, 1934?

The auditor must report to the Reserve Bank, stating the aggregate amount of deposits held by the NBFC. Section 45MA(1) makes inquiry into deposit statements an auditor's duty, and the report to the Bank is required unless the auditor is satisfied the statements were furnished.

  1. AMake a report to the Bank giving the aggregate amount of deposits held by the companyCorrect
  2. BIgnore the matter, because deposit returns are management's responsibility only
  3. CReport only to the shareholders at the general meeting, not to the Bank
  4. DWait for the RBI to issue a special audit order before taking any action

Explanation

Section 45MA(1) makes it the auditor's duty to inquire whether the required deposit statements were furnished to the Bank. Unless satisfied that they were, the auditor must make a report to the Bank giving the aggregate amount of deposits held. Ignoring the matter or waiting for a special audit order is not what the section provides.

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