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Internal Audit of Stock Brokers

Today (23rd Jan), I attended the Professional Development meet of the Bangalore chapter of the Institute of Cost & Works Accountants of India. The topic was "Mandatory Internal Audit of Stock Brokers", presented by CMA.K.N.Mahesh. He is a Commerce Graduate and a Fellow Member of the ICWAI. He currently practicing as a Cost Accountant. He has experience in the Internal Audit of the Stock broking outfits, per the SEBI guidelines.

It was a nice session, well attended by members. He approached the topic by giving the reason for such a mandatory provision by SEBI and the scope for the Internal Audit.

He took us through the various areas that are audited, the method of conducting the audit (sampling, questionnaires etc.,), the pre-audit work required, etc.,.

He touched upon how the prevention of money laundering relate to the internal audit of the stock brokers. He also briefed about the various internal controls and checks that a broker should maintain and how those areas are audited.

He highlighted the risk management of the business and how it is being evaluated.

Though the program was for an hour, it extended by 30 minutes, as he took the questions posed by the members present and answering them. It is a huge area and he made sure that it is covered in an hour.

This is a new area, where the Cost & Management Accountants (CMAs) can venture into, in the capacity of Management Accountant.

I also had the opportunity to meet up with few members and befriended them.

It was a nice evening, with a learning.

Cheers,
Gopal

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