Page 241 - DCOM509_ADVANCED_AUDITING

Advanced Auditing

Notes
 Lining of dirty water dams to prevent seepage; and
 Rehabilitation of pyrite stockpiling areas, which are a potential pollution source.
These measures are intended to substantially reduce the risk of groundwater pollution,
ensuring company compliance with national water management policy, while at the
same time minimising AngloGold Ashanti’s potential liability.
Question:
Analyse the case and write down the case fact.

Source: http://www.anglogold.com/subwebs/informationforinvestors/reporttosociety05/
values_bus_principles/environment/e_cs_sa_5_8.htm

12.6 Summary

 The public sector undertakings differ from private sector undertakings in many ways.

 These undertakings have been set up mainly in three forms, viz., departmental commercial
undertakings, statutory corporations and government companies.
 A majority of these undertakings have been set up as government companies under the
Companies Act, 1956 just like any other company in the private sector.
 The objective of the Financial Committees is not to focus only on the individual irregularity,
but on the defects in the system which leads to such irregularity, and the need for correction
of such systems and procedures.
 Under the Act of 1971, the scope and extent of audit is determined by the Comptroller and
Auditor General.
 The areas covered in comprehensive audit vary from enterprise to enterprise depending
on the nature of the enterprise, its objectives and operations.

 Audit appraisal analyses the performance of an enterprise to bring out the extent to which
the objectives for which the enterprise was set up have been served.

 A basic task in audit is to carefully identify the acceptable criteria for assessing the efficiency
and effectiveness of an enterprise so that the appraisal by audit is valid and meaningful.
 Sub-section (1) of section 30 of the Act requires that the balance sheet and profit and loss
account of a banking company should be audited by a person duly qualified under any
law for the time being in force to be an auditor of companies.

 The auditor of a banking company is to be appointed at the annual general meeting of the
shareholders, whereas the auditor of a nationalised bank is to be appointed by the bank
concerned acting through its Board of Directors.

 Under section 12 of the Insurance Act, 1938, the financial statements of every insurer are
required to be audited annually by an auditor.

 The auditor’s primary objective in audit of investments is to satisfy himself as to their
existence and valuation.
 Under Rule 30 of the KCS Rules every Co-operative Society shall pay to the State
Government a fee for the audit of its accounts for each Co-operative year in accordance
with the scale fixed by the Director with the previous approval of the State Government in
respect of the class of societies to which it belongs.

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