Bank Concurrent & Statutory Audit: After Approval: What Continues
Bank Concurrent & Statutory Audit does not end at approval — a set of obligations continues afterwards. The questions below are the ones raised most often in practice; the full scope of the service is on the Bank Concurrent & Statutory Audit page.
What is the difference between concurrent audit and internal audit?
Internal audit is typically a broader, risk-based review of the bank's or branch's overall operations and controls, often conducted by the bank's own internal audit function (or an external firm engaged for that specific role) on a periodic cycle that may be annual or aligned with a risk-based audit plan. Concurrent audit is narrower in scope but far more frequent — a continuous or near-continuous transaction-level review of specific high-risk areas, run in parallel with, and complementary to, the internal audit function rather than replacing it.
In practice: We coordinate with a bank's internal audit function where both are engaged at the same branch, to avoid unnecessary duplication of testing effort and to ensure findings from each function are cross-referenced.
What is the difference between concurrent audit and RBI's own inspection of a bank?
Concurrent audit is a function the bank itself commissions and pays for, using an empanelled CA firm or internal team, reporting to bank management as part of the bank's own internal control architecture. RBI inspection (or supervisory examination) is a distinct regulatory exercise conducted by RBI's own supervisory teams under its statutory powers over banks, assessing the bank's overall health, compliance, and governance — concurrent audit findings can be reviewed by RBI inspectors as part of assessing the bank's internal control environment, but the two are not the same exercise.
In practice: We advise clients that strong, well-documented concurrent audit coverage often reflects favourably when RBI inspectors assess a bank's internal control framework, even though concurrent audit itself is not an RBI exercise.
How does concurrent audit help a bank ahead of its annual statutory audit?
A branch under active, well-executed concurrent audit coverage typically enters its annual statutory audit with fewer unresolved documentation gaps, better reconciliation discipline, and a documented track record of how prior irregularities were identified and addressed — all of which can streamline the statutory auditor's risk assessment, though it does not substitute for the statutory audit's own independent IRAC-based testing and LFAR preparation.
In practice: We are explicit with clients that concurrent audit complements but never replaces statutory branch audit — the two serve different regulatory purposes and neither can substitute for the other's specific mandate.
What is a Long Form Audit Report (LFAR) and does concurrent audit produce one?
The LFAR is a structured, RBI-prescribed questionnaire completed as part of the annual statutory branch audit, covering asset quality, credit appraisal adherence, security documentation, and internal control observations. Concurrent audit does not produce an LFAR — it produces periodic management reports on its own format — but well-documented concurrent audit findings through the year can meaningfully inform the statutory auditor's LFAR responses where the same firm, or a coordinating firm, holds both mandates.
In practice: We treat concurrent audit's periodic findings as a running input file for the eventual statutory LFAR at year-end, rather than two entirely disconnected work streams, wherever PNPC holds both mandates.
What internal controls beyond advances does concurrent audit typically examine?
Beyond loan disbursement documentation, concurrent audit typically covers: cash handling and dual-custody controls over the vault, adherence to sanctioned delegation-of-authority limits, deposit account operations including premature closures, remittance and clearing transaction accuracy, reconciliation discipline over suspense and inter-branch accounts on a running basis, and — where applicable — forex and treasury transaction compliance.
In practice: Reconciliation discipline is an area where continuous concurrent audit adds particular value — aged, unexplained suspense entries are far easier to trace and resolve when flagged within weeks rather than discovered as a stale, unexplained balance at year-end statutory audit.
Where this sits in the wider engagement
Bank Concurrent & Statutory Audit rarely arrives on its own. The statutory basis and the current requirements are set out on the Bank Concurrent & Statutory Audit service page, and the related services are grouped under Audit Assurance.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On Bank Concurrent & Statutory Audit we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.