2. He should see that Annual Accounts of the banking company have been prepared in proper form.
3. He should examine the system of internal check and control and ascertain whether such a system is adequate or not. Generally, banks have a separate audit department for the examination of day-to-day transactions. The efficacy of such a system should be examined.
4. He should visit the bank on the last working day of the year to count the cash himself. If the money has been kept with the Reserve Bank of India or any other bank, he should obtain a certificate confirming the deposit.
5. He should specially check the receipt of drafts, cheques, etc., on the last working day which has not been entered in the books.
6. He should verify investments and income there from. It should be seen that investments have been properly valued.
7. He should vouch the interest on loans and advances and ensure that irrecoverable interest is adequately provided for.
8. He should verify bills discounted and also discount received in respect of such bills. It is to be ascertained that the rebate on bills discounted and unmetered bills has been carried forward.
9. Sometimes, a banking company gets a commission from its customers for services rendered to them. If so, such a commission received should be vouched by proper vouchers.
10. He should verify the securities deposited with bank for safe custody purpose and see that income in respect thereof has been properly accounted for.
11. He should see that capital expenditure has been properly dealt with in the books and proper distinction has been made between capital and revenue.
12. He should check the balance of Current Account, Fixed Deposit and Savings Bank Ledgers with the schedules obtained from the client and ascertain that all interest outstanding on deposits has been provided for.
13. All assets and liabilities should be verified and it should be seen that adequate provision has been made for doubtful and bad debts. He should specially check the overdrafts, etc.
14. He should examine the Branch Returns and ensure that they are being properly incorporated in the Head Office books.
15. He should go through the details of Secret Reserves, if any, maintained and see that their purpose is genuine.
16. He should ascertain the adequacy of Securities in respect of loans and advances in both cases, fully secured and partly secured.
17. He should ensure that 20% of profits before paying dividend is transferred to the Reserve Fund as required under the Act.
18. He should see that the provisions of Sees. 11-20 (Stated earlier) of the Banking Companies Act have been fully complied with.