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Government Audit


Government audit means the organised and independent examination of a public entity’s financial, administrative and other operations for evaluating and verifying them. Thus, government auditing is the objective, organised, professional and independent examination of financial, administrative and other processes of a public entity made subsequently to their effects for the purpose of assessing and confirming them, presenting a report containing explanatory comments on audit findings together with conclusions and directions for future actions by the responsible officials and in the case of examination of financial statements, communicating the appropriate professional opinion regarding the fairness of the presentation.

Appointment of auditor
The President of India shall appoint Comptroller and Auditor General (CAG).

Removal or resignation
An auditor can be separated from the office only on the ground of attested misbehaviour or incapacity. Moreover, he can be removed from the office only when each house of parliament decides to do so by a majority of at least two-thirds of members present and voting. After that, auditors can resign through a resignation letter addressed to the President of India.

He shall hold office for six years or up to the age of 65 years, whichever is earlier.

Duties of comptroller & auditor general
Following are the duties required for comptroller and auditor general:

  • Compile and submit accounts
  • To audit receipts and expenditure
  • To audit grants and loans
  • To audit receipts of unions or states
  • To audit accounts of stores and stock
  • To audit books of accounts of government companies and corporations
  • To audit and report
  • Submission of accounts

Powers of comptroller & auditor general

  1. General powers
  • He can examine any office of accounts under the control of the Union or State Government.
  • He may require that any accounts, books, papers, and other documents relevant to the transactions under audit be sent to the specified place.
  • He can put such questions, as he may contemplate important, to the person in charge.
  • He can call for such information as he may need for the composing of any account or report.
  1. Direction by CAG to the auditor
  • In the case of a Government Company, CAG shall direct the auditor, how the accounts of the government company are essential to be audited.
  • The auditor shall relent a copy of his report to CAG.
  • The audit report shall, among other things, comprises the directions, if any, furnished by the Comptroller and Auditor General, the action taken afterwards and its impact on the accounts and financial statement of the company.
  1. Right of CAG to conduct the supplementary audit or supplementary the audit report
    Within 60 days from the date of receipt of the audit report, CAG shall have the following rights:
  • Supplementary audit
    • Comptroller and Auditor General may order the conduct of a supplementary audit of the financial statement of the company
    • The supplementary audit shall be conducted by such person as Comptroller and Auditor General may authorise in this behalf
  • Supplementary /comment
    • CAG may comment upon the audit report
    • CAG may supplement the audit report
    • The company shall send any such supplement or comments to every person entitled to copies of audited financial statements of the company.
    • Any such comments or supplements shall also be placed before the members in the Annual General Meeting (AGM) simultaneously and in the same manner as the audit report.
  • Test audit
    CAG may, by an order, cause a test audit to be conducted of the accounts of a Government company.

In the first place, the government audit serves to analyse how the resources allocated by a given administration are being used. After that, guidelines for action will be regulated so that the administration acts rightly and uses the resources in the best feasible way.

Thus, the value will be given to its image in the face of citizens and other public administrations. It is about alternating accordingly and caring about what matters, making a professional and excellent allotment of resources and upgrading the service to the taxpayer.

At AJSH, we assist our clients in dealing with internal audits, government audits, various corporate matters (Company incorporations, statutory audits, ROC compliances, company winding-up) in India by providing them adequate support and guidance from our end. If you have any questions or wish to know more about the Government audit, kindly contact us.


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