APPLICABILITY OF UDIN TO STATUTORY BANK BRANCH AUDIT

The ICAI vide announcement dated 26th September, 2018 has introduced the concept of UDIN. Initially it was applicable mandatory w.e.f. 1st January, 2019 which was later postponed to be applicable w.e.f. 1st February, 2019 in phased manner.

ICAI has issued an announcement dated 14^th March, 2019 wherein the applicability of UDIN is clarified. Accordingly, the UDIN is made mandatory to generated and used by members in practice, in following phases.

Effective Date	Type of Certifications
1st February, 2019	All certifications done by Practicing CAs
1st April, 2019	All GST and Tax Audit Reports
1st July, 2019	All other attest functions.

BANK AUDITS

The Members are now concerned about the applicability of UDIN for Statutory Bank Branch Audits for the financial year 2018-2019 that are set to be conducted in the first half of April, 2019. I have discussed the applicability of UDIN in the process of Statutory Bank Branch Audit in the ongoing paragraphs.

FIRST PHASE – 1^ST FEBRUARY, 2019 -ALL CERTIFICATIONS DONE BY PRACTICING CAs

In the first phase, the ICAI had made it mandatory to generate and mention UDIN on all certifications done by Practicing Chartered Accountants. However, it had specifically excluded the audit and attest functions from the first phase that was mandatory with effect from 1^st February, 2019.

ICAI had also issued an illustrative list (enclosed in annexure 1 for ready reference) of certificates for which UDIN is mandatory. The list consisted of 29 types of certificates and 1 general heading ‘others’ for which UDIN has to be generated. Under that list point number 21 (i.e. roman xxi) states about “Certificate issued by Statutory Auditors of Banks.”

There are various certificates that are issued during the course of statutory audit of banks. Accordingly, for any certificate issued by the statutory auditors during the course of statutory audit of banks, UDIN has to be mandatorily generated and used.

In case of multiple certificates to be signed in course of statutory audit of banks, no need to generate multiple UDINs for the same. One blanket UDIN can be generated for multiple certificates generated and signed on one day for a given branch.

SECOND PHASE – 1^ST APRIL, 2019 – ALL GST AND TAX AUDIT REPORTS

In the second phase, the UDIN is applicable to all GST and Tax Audit Reports with effect from 1^st April, 2019.

The statutory auditors of banks are also required to conduct and sign the tax audit of the bank also. Accordingly, the auditors have to generate and use UDIN on the tax audit reports signed on or after 1^st April, 2019. There is no need to generate separate UDINs for Form 3CA, 3CD and related annexures and certificates coming under the purview of Tax Audit. Again, a blanket UDIN can be generated for all of these.

However, care has to be taken that the UDIN generated for certificates and that for tax audit should be different as these are different attest functions. Again, care has to be taken that separate UDIN has to be generated for tax audit of each branch.

THIRD PHASE – 1^ST JULY, 2019 – ALL OTHER ATTEST FUNCTIONS

For all other attest functions, UDIN is mandatory with effect from 1^st July, 2019. These include audits under other statutes.

During the statutory audit of bank branches, the auditors also have to issue statutory audit report. As the statutory audit report comes under other attest functions, there is no need to generate and use UDIN for statutory audit reports of bank branches for the financial year 2018-2019 completed and signed before 1^st July, 2019. However, it shall be applicable for the financial year 2019-2020, i.e. next year.

REPORTS AND CERTIFICATES ISSUED IN A DIGITAL FORM

Few banks, like State Bank of India, require various reports and certificates to be issued in digital form and signed digitally. In such cases, wherever possible the UDIN should be mentioned on the certificate before signing it digitally. However, wherever it is not possible to mention UDIN on digitally signed certificates and audit reports, the UDIN shall be generate and preserved to be intimated on request to the authorities as and when required.

REQUIREMENT OF UDIN IN SHORT

The requirement of UDIN during the statutory bank branch audit is briefed below.

Statutory Audit Report	No
Tax Audit Report	Yes
Certificates	Yes

POINTS TO REMEMBER

Following care should be taken by the auditors while generating UDIN in the course of Statutory Bank Branch Audit.

Ø UDIN has to be generated separately for each branch.

Ø UDIN has to be generated separately for each type of assignment per branch, e.g. tax audit, certification, etc.

Ø If certificates for one branch are issued and signed on different dates, separate UDIN is to be generated on daily basis.

Ø In case of certificates issued and signed in a digital form, where there is no provision to mention UDIN, UDIN has to be generated and preserved to be intimated if required in future.

Ø There is no need to upload any certificate for generating UDIN.

ANNEXURE – 1

List of certificates for which UDIN is applicable from 1^st February, 2019. (This is illustrative list obtained from the dropdown list while generating UDIN.)

(i)	Certificates issued on the basis of Financial books of accounts and annual financial statements-Capital Contribution Certificate/net worth certificate
(ii)	Certificates issued on the basis of Financial books of accounts and annual financial statements - Turnover Certificate
(iii)	Certificates issued on the basis of Financial books of accounts and annual financial statements -Working Capital Certificate/Net Working Capital Certificate
(iv)	Certificates issued on the basis of Statutory records being maintained under Indian Companies Act, 2013 and applicable provisions
(v)	Certification of Fair Values of Shares of Company for the scope of merger / de-merger, Buy Back, Allotment of further shares and transfer of shares from resident to non-resident.
(vi)	Certificates for Foreign Remittance outside India in form 15CB.
(vii)	Net worth Certificates for Bank finances
(viii)	Net worth Certificates for Bank Guarantee
(ix)	Net worth Certificates for Student Study Loan
(x)	Net worth Certificates for Issuance of Visa by Foreign Embassy
(xi)	Certificate in respect of Liquid Asset under Section 45-IB of RBI Act, 1945
(xii)	Certification of arms length price u/s 92 of the income Tax Act, 1961.
(xiii)	Certificates for  funds/ Grants utilisation  for NGO’s
(xiv)	Certificates for  funds/ Grants utilisation  for Statutory Authority
(xv)	Certificates for  funds/ Grants utilisation  Under FERA/FEMA/other Laws
(xvi)	Certificates for  funds/ Grants utilisation  Charitable trust/institution
(xvii)	Certification under the Income-Tax laws for various Deductions, etc.
(xviii)	Certification for claim of refund under GST Act and other Indirect Taxes.
(xix)	Certification under Exchange Control legislation for imports, remittances, ECB,DGFT,EOU, etc
(xx)	Certificates in relation to initial Public Issue/compliances under ICDR and LODR.
(xxi)	Certificate issued by Statutory Auditors of Banks
(xxii)	Certificate issued by Statutory Auditors of Insurance Companies
(xxiii)	Additional Certification  by Concurrent Auditors of Banks not forming part  of the concurrent audit assignment
(xxiv)	Certificate of Short Sale of securities issued by Concurrent Auditors of Treasury Department of Banks
(xxv)	Certificate of physical verification of securities issued by Concurrent Auditors of Treasury Department of Banks
(xxiv)	Certificate issued for KYC purpose to banks confirming sole proprietorship
(xxv)	Certificate Regarding  Sources of Income
(xxvi)	Certificates for Claiming Deductions and Exemptions under various Rules and Regulations
(xxvii)	Certificates issued under LLP Act
(xxviii)	RBI Statutory Auditor Certificate for NBFCs
(xxix)	Certificate issued under RERA
(xxx)	Others

In case of any further query, members are free to contact me on following contact details.

CA. Amol Gopal Kabra

Latur, Maharashtra

Mobile – 9881-922-822

Email – amol@amolgkabra.in

Blog – https://www.amolgkabra.in

Twitter – www.twitter.com/amolgkabra