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Unit 14: Audit of a Partnership Accounts and Government Company

The objective of Government auditing is that of systematic, professional and independent Notes
examination of financial, administrative and other operations of a public entity made subsequently
to their execution for the purpose of evaluating and verifying them, presenting a report containing
explanatory comments on audit findings together with conclusions and recommendations for
future actions by the responsible officials and in the case of examination of financial statements,
expressing the appropriate professional opinion regarding the fairness of the presentation.
Following are the main objectives of government accounting:
1. To record financial transactions of revenues and expenditures related to the government
organizations.
2. To avoid the excess expenditures beyond the limit of the budget approved by the
government.
3. To make expenditures according to the appropriate act, rules and legal provisions of the
government.
4. To provide reliable financial data and information about the operation of public fund.
5. To prevent misappropriation of government properties by maintaining the systematic
records of cash and store items.
6. To facilitate for making auditing of the books of accounts.
7. To help for preparing different financial statements and reports.
8. To facilitate for estimating the annual budget by providing historical financial data of
government revenues and expenditures.

Audit Jurisdiction

The organizations, subject to the audit of the Comptroller and Auditor-General of India are:
1. All the Union and State Government departments and offices including the Indian Railways
and Posts and Telecommunications.
2. About 1500 public commercial enterprises controlled by the Union and State governments,
i.e. government companies and corporations.

3. Around 400 non-commercial autonomous bodies and authorities owned or controlled by
the Union or the States.
4. Over 4400 authorities and bodies substantially financed from Union or State revenues.

Notes Further, the Committee took the view that the holding companies should be required
to maintain records relating to consolidation of financial statements for specified periods.
Presentation of consolidated financial statements by the holding company should be in
addition to the mandatory presentation of individual financial statements of that holding
company.

14.2.2 Preservation of Records by the Companies

At present, Section 209 (4A) of the Act requires companies to preserve the books of accounts,
together with the vouchers relevant to any entry in such books of account, in good order,
relating to a period of not less than 8 years immediately preceding the current year. The

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