Audit Approach and Procedures
The auditor’s primary objective in audit of investments is to satisfy themselves as to their existence and valuation. Examination of compliance with statutory and regulatory requirements is also an important objective in audit of investments in as much as non-compliance may have a direct and material impact on the financial statements. The latter aspect assumes special significance in the case of banks where investment transactions have to be carried out within the numerous parameters laid down by the relevant legislation and directions of the RBI. The auditors should keep this in view while designing their audit procedures relating to investments. The Reserve Bank of India has started issuing Master Directions on all regulatory matters beginning January 2016.