It implies verification of transactions of a year on a continuous basis. The period of verification is primarily determined by the auditor. Financial statements are not prepared. Assets & liabilities are verified only at the time of finalization at the year-end.

Conceptually similar, both the audits intend to help the auditee in making decisions, to monitor and improve the efficiency and effectiveness of the internal controls, procedures followed by the audited company and so on. The only differences between the two are –

• Concurrent audit, as the name suggests, is a regular, ongoing process and is performed side by side with the operations of the audited entity, whereas internal audits can be periodic.
• The concurrent audit report may not be produced in the end but the internal audit report is always there.
• Concurrent audit is carried out by an independent Chartered Accountant whereas internal audit is done by internal audit department.

Concurrent auditors in UAE put revenue leakage or income leakage on a pedestal while auditing a company because it’s crucial to find income leakages and treat them. Income leakage can arise as a result of:

• Undercharged processing fee, upfront fee and other charges by the bank during loan disbursements.
• Incorrect interest rate entries in the system
• Wrong calculations of profit in a forex transaction

Fortunately, determining, retrieving and avoiding revenue leaks is possible by thoroughly examining contracts and processes critically.

Although the banks use highly intelligent software, human errors can have them slip money through their fingers. But it’s possible to find and minimise or prevent these income leakages through concurrent auditing. To succeed in dealing with revenue loss the concurrent auditor thoroughly checks the calculation and authenticity of the various charges. The revenue manual is provided by the client and ICAI both to the appointed auditor to go through so they can decipher the whereabouts of the leakage. Then the auditor produces different MIS reports from the system and analyse them up to the hilt. For instance, if the income leakage arose because the bank has undercharged the fees then the loss of income may result in a fall in market share price due to the weak performance of the bank. Contrary to this if the bank has overcharged the fees, then the false performance can mislead the client and stakeholders. It’s the auditor’s duty to present the true and fair performance report to the auditee.

Yes, they do. Besides inspecting overall housekeeping maintenance, the concurrent auditor has to cover all the areas possible while auditing an organisation including the location of the entity, trail of remittances made, foreign exchange transactions, KYC policies in practice, safety vaults adopted by it, the safety of lockers, computers being used, the software they are working on, and all the security measures taken to protect the information to draw true and meaningful conclusion and remedies to deal with the loopholes if found any.

The expenditure towards continuous audit can burn a hole in the pocket of the auditee as the audit is performed throughout the year and the auditor fees are high. The auditor may not re-verify the accounts relating to the period for which the verification is conducted earlier.