Concurrent audit is a continuous, near-real-time check of a bank's transactions, carried out while the business is happening rather than after the year closes. The bank appoints the auditor, and findings go to bank management so errors, frauds and control lapses can be fixed early.
Facts checked: 9 October 2026. The framework is the RBI circular of 18 September 2019 (RBI/2019-20/64), which replaced the 2015 guidelines. Read the circular itself before drafting an engagement for a specific bank.
Meaning in plain words
A statutory auditor looks back at the year. A concurrent auditor looks at today's and yesterday's transactions. The aim is to catch problems such as unauthorised overrides, missed checks on loan disbursal, or unreconciled entries while they can still be corrected.
What the 2019 framework changed
- Coverage is risk based. Each bank identifies the risk-sensitive areas of its own business model, instead of one common work programme for every bank.
- The audit includes random testing of a sufficiently large sample of transactions where needed.
- A concurrent auditor cannot stay with the same branch or business unit for more than three years.
- The bank's internal audit department sets up a reporting system for concurrent auditors, approved by the Audit Committee of the Board or the Local Management Committee.
We could not verify a fixed percentage coverage rule in the 2019 text, so this post does not quote one. Check the bank's own appointment letter for the units and volumes it expects you to cover.
What is checked
| Area | Typical checks |
|---|---|
| Daily transactions | Large and unusual entries, overrides, reversals, vouchers without authorisation |
| Advances | Sanction conditions met before disbursal, security and documentation, stock statements received |
| Deposits and remittances | KYC, account opening, cash handling, inter-branch entries |
| Reconciliation and accounting | Suspense, nostro and inter-branch balances ageing |
| Regulatory returns | Accuracy of data sent to the head office |
How it differs from other audits
| Concurrent | Statutory | Internal | |
|---|---|---|---|
| Timing | Daily or periodic, during the year | After year end | Planned cycle |
| Appointed by | The bank | Appointed through the RBI-approved process for banks | Bank management |
| Opinion on financial statements | No | Yes | No |
| Reports to | Branch head and bank management | Members, regulators | Audit Committee |
Example scenario
On a Monday review, the auditor finds three cash-credit limits enhanced on Friday, each by the same officer, without the revised stock statement on file. The auditor raises it as an exception report the same day. The branch obtains the documents or reverses the enhancement within the reporting period, rather than the issue surfacing at year end.
Related reading
For appointment criteria and how firms get on bank panels, see the bank concurrent audit empanelment resource, the UCO Bank and Union Bank of India notes, and the bank audit guide. For the end-of-year audit see the statutory audit workflow.
Frequently asked questions
Is concurrent audit mandatory?
It is required by RBI guidelines for banks, with coverage decided by each bank on a risk basis. Confirm applicability for the bank in question from the circular.
Does a concurrent auditor give an audit opinion?
No. The output is periodic reports and exception findings to management, not an opinion on the financial statements.
Can the statutory auditor also be the concurrent auditor of the same bank?
Independence rules and the bank's own appointment terms decide this. Check the appointment conditions before accepting both roles.
Who is eligible to be a concurrent auditor?
Eligibility is set in each bank's empanelment notice. See the empanelment links above.
Next: stock audit meaning and report, the audit process step by step, and key audit matters.
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