CA J is the statutory auditor of branch of a nationalized bank. During the audit, he is also focusing upon verification of Current Accounts &…

Audit procedure to verify Current Accounts and Saving Accounts are: Verify on a sample basis current account and saving accounts opened during the year for adherence to KYC norms. Verify that saving accounts are opened in name of individuals, HUF, some approved institutions like trusts, educational institutes etc. Remember that saving accounts are not opened for business or professional concern. The business transactions are carried in current accounts which can be opened for all kind of customers like companies, individuals, partnership firms etc.Verify the balances in individual accounts on a sample basis.Check the calculations of interest on a test check basis. Remember that no interest is paid generally on current accounts by banks.Examine whether the procedure for obtaining balance confirmation periodically has been followed consistently. Examine, on a sampling basis, the confirmations received.Ensure that debit balances in current accounts are not netted out on the liabilities side but are appropriately included under the head 'advances'.Inoperative accounts (both current and saving) are a high-risk area of frauds in banks. As per RBI guidelines, a savings/ current account should be treated as inoperative/dormant if there are no transactions in the account for over a period of two years. Verify on a sample basis some of inoperative accounts revived/closed during the year. Ensure that inoperative accounts are revived only with proper authority. In this regard, cases where there is a significant reduction in balances of such accounts as compared to previous year, examine authorisation for withdrawals.