What is concurrent audit ? Explain its scope with respect to issuance of DIS and verification of DIS.

Concurrent Audit: Concurrent audit is an examination of financial transactions and records that takes place concurrently with the transaction or very soon after it. It is a systematic and timely examination of financial transactions to ensure accuracy, compliance with procedures, and adherence to regulations. In the context of Depository Participants (DPs), NSDL vide its Circular No. NSDL/POLICY/2006/0021 dated June 24, 2006, mandated concurrent audit for processes like demat account opening, control, and verification of Delivery Instruction Slips (DIS) from August 1, 2006. Depository Participants are required to appoint a firm of qualified Chartered Accountant(s) or Company Secretary(ies) holding a certificate of practice for conducting the concurrent audit. Alternatively, they may entrust it to their Internal Auditors. Scope of Concurrent Audit with respect to Issuance of DIS and Verification of DIS: The scope of concurrent audit for DPs, specifically concerning the control and verification of Delivery Instruction Slips (DIS), covers the following areas: I. Issuance of DIS: The auditor must review the procedure followed by the Participants with respect to: Issuance of DIS booklets: This includes both regular booklets and loose slips. Controls on DIS issued to Clients: Verification of controls such as pre-stamping of Client ID and unique pre-printed serial numbers on DIS. Record maintenance: Checking the back-office records for the issuance of DIS booklets (including loose slips). II. Verification of DIS: The auditor must review the procedure followed by the Participants with respect to: Date and time stamping: Checking for proper date and time stamping (including late stamping) on instruction slips. Blocking of used/reported lost/stolen slips: Verification of blocking of used, reported lost, or stolen instruction slips in the back-office system/manual record. Blocking of executed slips: Ensuring that slips executed directly in the Depository Participant Module (DPM) are blocked in the back-office system/manual record. Two-step verifications: For transactions exceeding ₹5 lakhs, especially off-market transactions, verifying that a two-step verification process is followed. Instructions from dormant accounts: Scrutinizing instructions received from dormant accounts. The Concurrent Auditor is expected to conduct the audit for all accounts opened, DIS issued, and controls on DIS mentioned above, either during the day or by the next working day. If not completed, it must be ensured that the audit is completed within a week's time.