Advances generally constitute the major part of the assets of the bank. There are large number of borrowers to whom variety of advances are granted.…

Advances generally constitute the major part of the assets of the bank. There are large number of borrowers to whom variety of advances are granted. The audit of advances requires the major attention from the auditors. In carrying out audit of advances, the auditor is primarily concerned with obtaining evidence about the following: Amounts included in balance sheet in respect of advances are outstanding at the date of the balance sheet.Advances represent amount due to the bank.Amounts due to the bank are appropriately supported by Loan documents and other documents as applicable to the nature of advances.There are no unrecorded advances.The stated basis of valuation of advances is appropriate and properly applied, and that the recoverability of advances is recognised in their valuation.The advances are disclosed, classified and described in accordance with recognised accounting policies and practices and relevant statutory and regulatory requirements.Appropriate provisions towards advances have been made as per the RBI norms, Accounting Standards and generally accepted accounting practices.