Page 10 - Banking Finance September 2023

ROUNDUP

these cases is a little over 10,000 ICAI joints hands with IBA Bangladesh in Indian currency will
crore. Official data showed that with boost bilateral commerce, feels indus-
to improve audit quality
5,021 cases, involving a "detected try body CII. Bangladesh and India
Direct balance confirmation is a key
amount" of Rs. 30,000 crore, launched a trade settlement mecha-
audit evidence which is sufficient, ap-
Maharashtra was on top of the list. nism in Indian Rupee (INR) with the
propriate and can be relied upon by the
Gujarat (4,486) had the second high- broad objective of reducing depen-
auditors in their responsibility to form
est number of cases, while Delhi (Rs. dency on the US dollar and strength-
an opinion on the financial position of
14,00 crore) had the second highest ening regional currency and trade.
an entity. This audit exercise can be time
detection.
consuming and cumbersome. "This is a welcome step. This would
The minister said between July 2017 certainly promote growth of trade
Technology plays an important part in
and June 2023, the government had between the two countries and sup-
gathering audit evidence.In any bal-
identified 5,070 cases where fraudu- port the increasing interest of the glo-
ance sheet, bank balance as well as
lent GST registration had taken place bal trading community in INR," said
outstanding loan balances are impor-
by misusing Aadhaar and PAN. These chairman CII National Committee on
tant figures which the auditor needs to
cases involved illegal benefits of over review. Exim Sanjay Budhia. Since all exports
Rs. 27,400 crore. and imports and settlement of trade
Bank confirmations (both current ac-
transactions under this arrangement
count balances as well as loan bal-
may be denominated and invoiced in
SEBI lists 120 companies as ances) are vital for auditors to com-
INR, this would reduce dependence on
'untraceable' plete their obligations under various the US Dollar and would address situ-
reporting requirements.
The Securities and Exchange Board of ations like scarcity of forex reserves
Currently auditors follow different
India (Sebi) has classified 120 cases apart from strengthening regional cur-
practices, formats, procedures for ob- rency and trade.
(companies) as untraceable out of 692
taining confirmations from the banks.
cases in the 'difficult to recover' cat- Due to this arrangement, the transac-
Auditors often find it difficult to get
egory with dues to the tune of Rs tion costs during trade between the
information from banks so they have to
73,287 crore as of March 2023. countries will reduce thereby boosting
rely on third parties to provide confir-
the Indian exports to Bangladesh, he
The number of untraceable companies mation. This raises questions on the
added.
rose from 94 in March 2022, Sebi said. credibility of information.
These untraceable companies are be-
To streamline the auditing process, the
lieved to be vanishing companies which Over 4 lakh businesses to
ICAI in association with the Indian
disappeared after raising funds from
Banks Association (IBA) has approved issue e-invoices as thresh-
the public.
a plan to develop and jointly control a
old lowers to Rs. 5 crore
Further, there were 341 companies in common balance confirmation portal
which promises high efficiency and re- from August 1
the 'defunct company' category as of
liability. The IBA has engaged with the
March 2023 as against 238 in the pre- From August 1, an additional over 4
RBI's Institute for Development and
vious year, Sebi said in its Annual Re- lakh assesses will be required to issue
Research in Banking Technology
port. There were 83 defaulters who e-invoice mandatorily as the new
(IDRBT) and National E-Governance
are alive but without any attachable threshold of aggregate annual turn-
Services Limited to ensure the
assets as against 49 cases in the previ- over of Rs.5 crore will be in place from
platform's efficient and secure imple-
ous year. said date.
mentation.
There are 307 cases involving Rs At present, the threshold is Rs. 10
88,127 crore pending before various crore, which was Rs. 500 crore when
CII: Re trade with Bangle
courts, tribunals and other fora related mandatory generation of e-invoice
to boost bilateral biz implemented from October 1, 2020. At
to matters where recovery certificates
are drawn. Trade settlement between India and present, around 6 lakh assesses are
10 | 2023 | SEPTEMBER | BANKING FINANCE