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Unit 10: Government and Independent Financial Audit: Comparison

8. To facilitate for estimating the annual budget by providing historical financial data of Notes
government revenues and expenditures.

10.1.2 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.
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.
Self Assessment

Fill in the blanks:
1. The Indian Audit and Accounts Department functions under the ………………………………
2. …………………….. forms an indispensable part of the financial administration.
3. …………………………….. aims to ensure accountability of the executive in respect of
public revenue and expenditure.
4. Initially government auditing in India is primarily ……………………………… oriented.

10.2 Audit of Government Companies

Section 617 of the Companies Act defines a Government company as a company in which not
less than fifty-one per cent of the paid up share capital is held by the Central Government, or by
any State Government, or Governments, or partly by the Central Government and partly by one
or more State Government. It also includes a company which is a subsidiary of a Government
company.

Certain special provisions have been laid down in the Act regarding a Government company.
They are discussed below:
The auditor of a Government Company shall be appointed or reappointed by the Central
Government on the advice of the Comptroller and Auditor General of India. The Comptroller
and Auditor General of India will have the power to direct the manner in which the company’s
accounts shall be audited by the auditor. He shall also have the power to conduct a supplementary
or test audit of the company’s accounts by such person or persons as he may authorize in this
behalf.
The auditor will submit a copy of the audit report to the Comptroller and Auditor General of
India who may comment upon or supplement the audit report in such manner as he may think
fit. Such comments or supplementary report shall be placed before the annual general meeting
along with the audit report.

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