Page 179 - DCOM509_ADVANCED_AUDITING

Advanced Auditing

Notes Where the Central Government is a member of the Government Company it shall cause an
annual report on the working and affairs of the company to be prepared and laid before both
Houses of Parliament along with the audit report and the comment, if any, of the Comptroller
and Auditor general or India. The report shall be prepared within 3 months of the annual
general meeting. Where the State Government is also a member, the report shall also be laid
before the state legislature. But where the Central Government in not a member of the
Government Company, the State Government concerned shall cause the above documents
prepared and laid before the state legislature.

Task Elaborate with example laws governing the audit of Government companies.
Identify its scope.
The Companies Amendment Act 1974 has enlarged the concept of Government Company for
the purposes of audit. Section 619B has been inserted and it provides that the provisions of
section 619 for the purposes of audit shall apply to a company in which at least 51% of the paid
up share capital is held by the one or more the following or any combination thereof:
1. The Central Government and one or more Government companies;

2. Any State Government or governments and one or more Government companies;
3. The Central Government, one or more State Governments and one or more Government
companies;

4. The Central Government and one or more corporations owned or controlled by the Central
Government;
5. The Central Government, one or more State Governments and one or more corporations
owned or controlled by the Central Government;
6. One or more corporations owned or controlled by the Central Government or any State
Government;
7. More than one Government company.
The Central Government may by notification in the Official Gazette direct that any of the
provisions of the Act (except the above noted provisions) shall not maybe ought to apply to any
Government company or shall apply with such exceptions, modifications and adaptations as
may be specified in the notification. A copy of every such notification shall be laid in draft
before both Houses of the Parliament for a period of not less than 30 days while they are in
session. Since the said period of 30 days cannot, sometimes be completed in one session, section
620 has been amended by the Companies (Amendment) Act, 1977 to permit the period of 30 days
to be completed in one session or in two or more successive sessions.

Self Assessment

Fill in the blanks:
5. The auditor of a Government Company shall be appointed or reappointed by the Central
Government on the advice of the …………………………………….. of India.
6. The annual report on the working and affairs of the company shall be prepared within
………………. months of the annual general meeting.

7. The ………………………………. Act, 1974 has enlarged the concept of Government
Company for the purposes of audit.

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