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

While auditing Sundaram Finserv Ltd, a deposit-taking NBFC, the auditor finds that the company has not furnished to the Reserve Bank the statements and particulars about deposits that are required under the relevant Chapter of the RBI Act, 1934. As per Section 45MA, what should the auditor do?

The auditor must report to the Reserve Bank the aggregate amount of deposits held by the NBFC. Section 45MA(1) requires him to inquire whether the required deposit statements were furnished, and unless satisfied that they were, he must make this report to the Bank.

  1. AMake a report to the Bank giving the aggregate amount of deposits held by the company, since he is not satisfied that the statements were furnishedCorrect
  2. BOnly mention the lapse orally to the Audit Committee, as the RBI Act places no reporting duty on him
  3. CWait for the RBI to issue a special audit order before taking any action
  4. DReport the matter only to the Registrar of Companies

Explanation

Section 45MA(1) makes it the auditor's duty to inquire whether the required deposit statements were furnished to the Bank. Unless he is satisfied on inquiry that they were furnished, he must report to the Bank the aggregate amount of deposits held. Waiting for a special audit order or reporting only to the ROC does not discharge this duty.

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