The document discusses the roles and responsibilities of the Comptroller and Auditor General of India regarding auditing of public sector undertakings. It outlines the different types of audits conducted including compliance, performance, propriety and comprehensive audits. It also describes the audit process and reporting structure for public sector audits in India.
The document discusses the roles and responsibilities of the Comptroller and Auditor General of India regarding auditing of public sector undertakings. It outlines the different types of audits conducted including compliance, performance, propriety and comprehensive audits. It also describes the audit process and reporting structure for public sector audits in India.
The document discusses the roles and responsibilities of the Comptroller and Auditor General of India regarding auditing of public sector undertakings. It outlines the different types of audits conducted including compliance, performance, propriety and comprehensive audits. It also describes the audit process and reporting structure for public sector audits in India.
The document discusses the roles and responsibilities of the Comptroller and Auditor General of India regarding auditing of public sector undertakings. It outlines the different types of audits conducted including compliance, performance, propriety and comprehensive audits. It also describes the audit process and reporting structure for public sector audits in India.
C&AG shall hold office for a term of six years or upto the age of 65 years, whichever is earlier
Three Committees:
1. Public Accounts Committee: Duty to satisfy itself that:
(i) that the moneys were disbursed legally on the service or purpose to which they were applied; (ii) that the expenditure incurred was authorised; (iii) that re-appropriation has been made in accordance with the provisions made (i.e. distribution of funds). (iv) to examine the statement of accounts of autonomous and semi - autonomous bodies, the audit of which is conducted by the Comptroller & Auditor General 2. Estimates Committee: The Committee examines the estimates with a view to:
By: Shubham Keswani
(i) report what economies, improvements in organization, efficiency or administrative reform, consistent with the policy underlying the estimates may be effected; (ii) suggest alternative policies; (iii) examine whether the money is well laid out within the limit; and (iv) suggest the form in which the estimates shall be presented to Parliament. 3. Committee on Public Undertakings (COPU) (i) to examine the reports and accounts of PSUs (ii) to examine the reports of the C&AG on public undertakings (iii) to examine the autonomy and efficiency of psu and to see whether they are being managed in accordance with sound business principles and prudent commercial practices (iv) to exercise such other functions vested in the PAC and the Estimates Committee as are not covered above and as may be allotted by the Speaker from time to time
C&AGs Role: Friend, Philosopher & Guide to committees
Ø Reports form basis of committee’s working Ø Scrutinises notes submitted by ministries to committees Ø Financial committees à Report à Parliament/ State legislature (observations/recommendations) Ministries/Dept à Inform action à Committees à Action taken report à P/S Ø If A/R couldn’t be discussed in detail, written ans. obtained from dept/ministries to ensure A/R not taken lightly by Govt even if entire report not deliberated by committee
Objective & Scope of PSU Audit
1. Audit of PSU not constrained to Financial & Compliance audit 2. Propriety audit 3. Comprehensive audit 4. Org decision by competent authority 5. Helping govt 6. Highlight issues of efficient & economic operations 7. Fiscal & managerial accountability
Elements of PSU Audit
Auditor: Its SAI (Supreme Audit Institution) , India [SAI= C&AG + Indian Audit & Accounts Dept(IAAD) ]
By: Shubham Keswani
Principles of PSU Audit
Audit of Govt Cos.
1. 143(5) C&G direct manner a/c audited + auditor includes in report (*3) Directions issued+ action taken thereon + impact on a/cs & financials 2. 143(6)(a) Supplementary Audit Within 60 days from date of receipt of audit report 3. 143(6)(b) Comment upon/ supplement audit report è Sent by Co. to every person entitled to secure copies of audited f/s + place before members in AGM 4. Test Audit u/s 143(7) Provisions of sec 19A of C&AG (D,P & COS Act,1971) shall apply to such test audit
By: Shubham Keswani
Compliance Audit Compliance audit is the independent assessment of whether a given subject matter is in compliance with the applicable criteria.
Compliance audit is concerned with:
(a) Regularity- adherence of the subject matter to the formal criteria emanating from relevant laws, regulations and agreements applicable to the entity.
(b) Propriety- observance of the general principles governing sound financial management and the ethical conduct of public officials.
Performance Audit A performance audit is an objective and systematic examination of evidence for the purpose of providing an independent assessment of the performance of a government organization, program, activity, or function in order to provide information to improve public accountability and facilitate decision-making by parties with responsibility to oversee or initiate corrective action.
(i) Economy: Minimize cost of resources used for an activity, having regard to qty, quality and best price. (ii) Efficiency: Input-output ratio. Max output with min input. Or min input for given quality & qty of output Following to be checked: Ø Sound procurement policies Ø Resources are protected & maintained Ø Efficient utilisation of physical, financial & HR Ø Public sector prog/entities/ activities efficiently managed Ø Objectives met cost effectively By: Shubham Keswani (iii) Effectiveness: Extent to which objectives achieved & relation b/w intended & actual impact of activity Check: Ø Objectives & means provided (legal, financial etc) for public sector prog. Consistent with policy Ø Extent to which results achieved Ø Assess & establish with evidence that social & economic impact due to policy or other causes Ø Identify factors inhibiting satisfactory performance Ø Assess compliance with laws & regulations Ø Assess effectiveness of prog or individual components
Case study by ICAI
Q. Performance audit of enforcement mechanism administering provisions of Minimum Wages Act ( social welfare legislation)
Ø Auditor possess knowledge of industries or labour contracts where provisions applicable
Ø Evaluate std of living before and after implementation of the Act Ø Also evaluate EEE in welfare system to be audited Ø Study shortcomings in coordination b/w different agencies like labor dept, ESI , EPF organisations Ø Shall also point out lacuna in existing legal framework to strengthen objective of legislation
Planning for Performance Audit
By: Shubham Keswani
Comprehensive Audit Efficiency cum performance audit. Locate area of weakness and extravagance for mgt information.
Some of issues examined in comprehensive audit are:
Ø Overall cost of capital compared with approved planned cost? Is there a substantial increase? If yes any extravagance or unnecessary expenditure? Ø Accepted prodn or output achieved? Underutilisation of installed capacity or shortfall in performance? Ø Planned rate of return achieved? Ø System of project formulation and implementation sound? Ø Are cost control measures adequate? Ø Does enterprise have R&D program? Ø Does enterprise have adequate system of R&M
Propriety Audit Verification of transaction under test of public propriety, commonly accepted customs, & stds of conduct.
Principles of Propriety
Ø Expenditure not prima facie more than what occasion demands + sufficient vigilance by officers Ø Authority utilising power to sanction expenditure not accruing to its own benefit Ø Funds not to be utilised to benefit particular person(s) Ø Apart from agreed remuneration & reward no other avenue benefit indirectly mgt person, employee or others
Provisions of Cos Act
1. Sec 143(1) requiring enquiry into certain specified matters (A/B/C/D/E/F)
2. 143(6) & (7) è Supplementary & test audit 3. Sec 148 è Cost records & Audit è Cost consciousness in mgt 4. Additional info. Part II of Schedule III
Propriety elements under CARO, 2020
Hint: Clause iii, iv,viii, ix, x, xi, xii, xv, xviii
By: Shubham Keswani
Parts of Audit Report of C&AG Ø Introduction è general review of working results of Govt Co/ deemed govt co. Ø Results of comprehensive appraisals of selected undertakings conducted by Audit board Ø Resume of Co Auditor’s report submitted under directions of C&AG & that of comments on a/cs of govt cos. Ø Significant results of audit of undertakings not taken up for appraisal by audit board
"The Language of Business: How Accounting Tells Your Story" "A Comprehensive Guide to Understanding, Interpreting, and Leveraging Financial Statements for Personal and Professional Success"
"The Language of Business: How Accounting Tells Your Story" "A Comprehensive Guide to Understanding, Interpreting, and Leveraging Financial Statements for Personal and Professional Success"
