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Internal Audit to Forensic Bend- Business Travel to Personal Trip May 13, 2012

Posted by Khurana Khurana & Associates LLP Chartered Accountants in Forensic Accounting & Auditing.
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Travel and Entertainment expenses is one of the crucial and costlier areas to focus upon, not only in terms of evidences or approvals but also in terms of cost savings to the company.

Travel and Entertainment usually spent by top shots including the client executives or sales development team should not be left unattended during auditing. The travel statements not being settled on time, submitted with lack of supportings and bills, unusual travel expenses are the red flag that one can look for, where money can be siphoned off.

In this fast running business world, the biggest cost of travel and entertainment expense goes towards the flight cost. We did check for the e-tickets stating the destination, amount etc., but did we ever check for the boarding passes? Is it not important to know that the employee has actually travelled or cancelled the ticket and has travelled by a low cost airline? Employees using their personal credit cards to book the flight ticket, generate an e-ticket and invoice from internet and claim the entire flight cost from the company. But who acknowledges that he actually travelled by the same flight or by low cost flight. Did we forgot to check his credit card statement stating that he has got the refund of the costlier flight which he never boarded? How many times the up-gradation charges from Economy class to Business class has been built into the flight cost? Is it worth checking? Yes it will be a saving to the company to spend some time while processing these bills.

Another costlier head goes towards accommodation. Do we enquire enough to track if the room has been booked in double occupancy or the stay has been extended toward weekend even after the conference got over? Does the meal expenses shoots up extra ordinary high due to liquor expenses been built in the same?

Do we realize that a person travelling miles of distance by car and claiming fuel expense instead of easy way of travel by flight or train?

Isn’t it an easier way to make business trip to personal?

So which way you chose to do audit?

A little forensic bend to internal audit, scores to big savings for the company.

 

Author

Meena Lalchandani Khurana

ACA, AICWA, DISA (ICAI), M.COM, B.COM

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Frauds – Classification and Reporting Notification by the Reserve Bank of India November 23, 2011

Posted by Khurana Khurana & Associates LLP Chartered Accountants in Forensic Accounting & Auditing.
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RBI 2011-12/266
DBS.FrMC.BC.No.4/23.04.001/2011-12

November 21, 2011

The Chairmen & Chief Executive Officers of all
Scheduled Commercial Banks (excluding RRBs)
and All India Select Financial Institutions

Dear Sir,

Frauds – Classification and Reporting

Please refer to our letter DBS. FrMC. BC. No.1 /23.04.001/2011-12 dated July 01, 2011 forwarding the Master Circular on ‘Frauds – Classification and Reporting’.

2. Following the constitution of Financial Conglomerate Monitoring Division (FCMD) in the Department of Banking Supervision, Central Office to supervise and monitor 12 large banks in the country the names of which are given in Annex and other related developments, it has been decided to amend para 3.1.4 of Master Circular DBS. FrMC. BC. No. 1/23.04.001/2011-12 dated July 01, 2011 on ‘Frauds – Classification and Reporting’ relating to reporting of fraud cases to various offices of RBI as under:

3.1.4 a) Fraud cases involving an amount more than Rs. 1 lakh and upto Rs. 50 lakh

i) To the R.O under whose jurisdiction the branch where the fraud has taken place is located.

ii) To the R.O under whose jurisdiction the Head Office where the fraud has taken place is located.

Note: – In case the bank falls under the supervisory purview of Financial Conglomerate Monitoring Division (FCMD) (12 banks listed in the Annex.), the reporting is to be done to Reserve Bank of India, Financial Conglomerate Monitoring Division (FCMD), Department of Banking Supervision, Central office, 4th Floor, Centre 1, World Trade Centre, Cuffe Parade Mumbai-400005

in place of R.O under whose jurisdiction the Head Office where the fraud has taken place is located.

b) Fraud cases involving an amount of Rs. 50 lakh and above.

i) To the R.O under whose jurisdiction the head office where the fraud has taken place is located.

Note: – In case the bank falls under the supervisory purview of Financial Conglomerate Monitoring Division (FCMD) (12 banks listed in the Annex.), the reporting is to be done to Reserve Bank of India, Financial Conglomerate Monitoring Division (FCMD), Department of Banking Supervision, Central office, 4th Floor, Centre 1, World Trade Centre, Cuffe Parade Mumbai-400005 in place of R.O under whose jurisdiction the Head Office where the fraud has taken place is located.

ii) To Reserve Bank of India, Fraud Monitoring Cell, Department of Banking Supervision, Central office, 2nd Floor, Centre 1, World Trade Centre, Cuffe Parade Mumbai-400005

There will not be any change regarding submission of soft copy of fraud reports in FMR format to Reserve Bank of India, Fraud Monitoring Cell, Department of Banking Supervision, Central office immediately after the detection of fraud in all cases involving an amount of Rs. 1.00 lakh and above.

3. It has also been decided to amend para 3.2.6 of Master Circular DBS. FrMC. BC. No. 1/23.04.001/2011-12 dated July 01, 2011 on ‘Frauds – Classification

Yours faithfully

(A. Madasamy)
Chief General Manager


Annex

List of banks under the supervisory purview of Financial Conglomerate Monitoring Division (FCMD):

  1. State bank of India.
  2. Bank of Baroda.
  3. Bank of India.
  4. Canara Bank.
  5. Punjab National bank.
  6. Axis bank.
  7. HDFC bank.
  8. Kotak Mahindra bank.
  9. ICICI bank.
  10. Citi bank.
  11. HSBC.
  12. Standard Chartered bank.