UNDERSTANDING OF ACCOUNTING SYSTEM IN BANKS

 UNDERSTANDING OF ACCOUNTING SYSTEM IN BANKS

• From the time that customers had to physically visit and deal with a bank , there is a sea change in banking as use of technology and its continuous evolution has enabled banks to reach their customers in providing them the convenience and comfort of anytime-anywhere-banking by letting them access their information/data on real time basis, as stored in a safe and secure environment on the bank’s servers. 
• With many customers having access to Internet and mobile connectivity, monetary transactions from inception to finish have become expeditious through E banking; and but for Core banking technology and extensive advancement therein and the availability and extensive use of technology tools, Banks could not have achieved such phenomenal and accelerated growth, and could not have ventured into and offered a wide range of innovative products and services to their customers.
•  The transactions in banks have become voluminous and it needs to be ensured that in the system of recording , transmission and storage of information/ data, integrity thereof is optimally maintained and control systems ensure that the same is free of risks of errors, omissions, irregularities and frauds; and considering the challenges of technology , bank managements continuously endeavour to make the internal control systems robust , safe and secure as well as convenient and expeditious for the customers.
• In the Computerised environment, it is imperative that the auditor is familiar with, and is satisfied that, all the norms/parameters as per the latest applicable RBI guidelines are incorporated and built into the system that generates information/data having a bearing on the classification/ provisions and income recognition. 
• The auditor should not go by the assumption that the system generated information is correct and can be relied upon without evidence that demonstrates that the system driven information is based on validation of the required parameters for the time being in force and applicable.