Special Audit Considerations in Foreign Banks :
Audit of foreign banks operating in India, poses unique challenges compared to local banks in India. Foreign banks have different operating models
compared to local banks, and, to a limited extent, they also operate in a different regulatory environment.
Foreign banks operate in India through branches and do not have a separate legal entity existence in India. However, for all practical purposes, the
RBI regulates their functioning in India, with regards to scale and nature of business they undertake in India.
Auditors of foreign bank will have to modify their audit procedures so as to take care of the operational structure and operations of these banks.
Some of the important elements related to foreign banks which may have a bearing on the audit plan and procedure are listed below:-
Management structure.
More centralised operational functions.
High level of automation and IT functions.
Requirement for compliance with foreign legal and regulatory requirements.
Cross border flow and processing of data.
Complex treasury operations and cross border forex deals.