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Auditing Theory

Notes 3. Audit of newly formed concerns relating to two accounting years from the date of
commencement of their operations;
4. Certification or audit under Income-tax Act or other attestation work carried out by the
Statutory Auditor; and
5. Sales Tax Audit and VAT Audit.

14.3 Comptroller and Auditor-General of India

14.3.1 Audit Jurisdiction

The organisations 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.

14.3.2 Audit of Government Companies (Commercial Audit)

There is a special arrangement for the audit of companies where the equity participation by
Government is 51 percent or more. The primary auditors of these companies are Chartered
Accountants, appointed by the Comptroller and Auditor-General of India, who gives the
directions to the auditors on the manner in which the audit should be conducted by them. The
Comptroller and Auditor-General of India is also empowered to comment upon the audit
reports of the primary auditors. In addition, the Comptroller and Auditor-General of India
conducts a test audit of the accounts of such companies and reports the results of his audit to
Parliament and State Legislatures.

14.3.3 Audit Board Setup in Commercial Audit

A unique feature of the audit conducted by the Indian Audit and Accounts Department is the
constitution of Audit Boards for conducting comprehensive audit appraisals of the working of
Public Sector Enterprises engaged in diverse sectors of the economy.
These Audit Boards associate with them experts in disciplines relevant to the appraisals. They
discuss their findings and conclusions with the managements of the enterprises and their
controlling ministries and departments of government to ascertain their view points before
finalisation.
The results of such comprehensive appraisals are incorporated by the Comptroller and Auditor-
General in his reports.

14.3.4 Nature of Audit

While fulfilling his Constitutional obligations, the Comptroller & Auditor-General examines
various aspects of Government expenditure. The audit done by C&A G is broadly classified into
Regularity Audit and Performance Audit.

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