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Concurrent Audit
Concurrent audit in India is a type of internal audit that is conducted concurrently with the ongoing operations of a business or financial institution. The primary objective of concurrent audit is to provide real-time monitoring and assessment of transactions, processes, and compliance to ensure accuracy, efficiency, and effectiveness in operations.
INTERNAL AUDITING
Unlike traditional internal audits, which are conducted periodically after the financial year-end, concurrent audit takes place concurrently with the actual operations. It involves continuous monitoring of transactions and processes as they occur. The scope of concurrent audit can vary depending on the nature and size of the organization. It may cover various aspects, including financial transactions, accounting processes, internal controls, compliance with regulations, and risk management. Concurrent auditors are appointed by the organization, and they function independently to ensure unbiased assessments of processes and transactions.
One of the significant advantages of concurrent audit is that it allows for immediate reporting of any irregularities, errors, or fraud detected during the audit. This timely reporting enables prompt corrective action by the management. Concurrent audit helps in identifying potential risks and control weaknesses in real-time, enabling the organization to take corrective actions promptly and prevent potential losses. Some regulatory bodies or financial institutions in India may mandate concurrent audit for specific sectors, such as banks and financial institutions, to ensure compliance with regulatory guidelines and risk management practices.
Concurrent audit reports are shared with the management on an ongoing basis, providing insights into the organization’s financial health and operational performance. The management can use these reports to implement timely corrective measures and ensure compliance with internal policies and regulatory requirements.
Overall, concurrent audit is a valuable tool for organizations, especially financial institutions, to maintain transparency, prevent frauds, improve operational efficiency, and uphold good corporate governance practices.
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