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

The auditor of Kaveri Capital Ltd, an NBFC, has made a report to the RBI under Section 45MA(1) about deposits. The statutory audit report is yet to be signed. According to Section 45MA(2), what should the auditor do?

The auditor must include in the audit report the contents of the report already made, or intended to be made, to the Reserve Bank under Section 45MA(1). A bare reference or omission does not satisfy the section, and no board permission is required.

  1. AKeep the RBI report confidential and exclude it from the audit report
  2. BInclude in the audit report the contents of the report made or intended to be made to the BankCorrect
  3. CAttach only a one-line statement that a report was sent, without the contents
  4. DSeek the Board's permission before deciding whether to mention it

Explanation

Section 45MA(2) provides that where the auditor has made or intends to make a report to the Bank under sub-section (1), the contents of that report must be included in the audit report. Mere mention of a report, or exclusion, does not comply. Board permission is not a condition.

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