CFOs, auditors must follow regulations in letter and spirit says RBI
financial institutions must guard against any misadventure or intelligent interpretation of regulations or accounting standards, deputy governor Swaminathan J said in his remarks at the conference of CFOs and statutory auditors organised by the Reserve Bank of India (RBI).
Banks must also keep the amount of internal accounts to the minimum as some of these accounts have been found to be used as a conduit for certain fraudulent transactions, Swaminathan who is in charge of financial supervision and inspection departments with the central bank among others said.
“We found certain banks having lakhs of such accounts with apparently no valid reason. Some of these accounts were also used as a conduit for certain fraudulent transactions and ever-greening of loan accounts. Internal accounts are high risk in nature on account of its potential for misuse. I therefore request the CFOs to have them rationalised completely, bring them down to the essential minimum and exercise greater control through periodical reconciliation and a proper reporting to the audit committee of the board (ACB), Swaminathan said.
He said CFOs should invest in technology and data analytics which will help them to provide more accurate and real-time financial insights. Swaminathan said auditors should deploy competent staff equipped with necessary training, skills, and experience, particularly in critical areas such as information technology (IT) and cyber security. “By ensuring audit teams are well-versed in emerging technologies and security
