What is role of CAG in Audit of Corporations?
Q. What is role of CAG in Audit of Corporations?
1) CAG appoints members to Audit Board.
2) RBI is audited by CAG.- Published on 15 Mar 17a. Only 1
b. Only 2
c. Both 1 and 2
d. None of the above
ANSWER: Only 1
Audit of Corporations by CAG -
- CAG’s role in auditing of public corporations is restricted.
There are broadly 3 categories -
1. Total and Direct Audit by the CAG - Examples of this are - ONGC, Air India, Damodar Valley Corporation, Indian Airlines Corporation etc.
2. Audit by private professional auditors appointed by Central Government on consulting CAG - Here if required, CAG can undertake supplementary audit. Examples are Industrial Finance Corporation etc.
3. Total audited by private professionals - The public corporations who get audited exclusively by private professional auditors submit their annual reports and accounts directly to the Parliament. Examples are LIC India, RBI, FCI, SBI etc.
- Government companies get audited by private auditors appointed by the Government on consulting CAG.
- But, CAG can undertake supplementary audit of such companies.
- To use specialists and experts from outside for handling technical aspects of audit of specialized enterprises like engineering, iron and steel, chemicals, etc. an ‘Audit Board’ was established as a part of the office of CAG in 1968.
- Administrative Reforms Commission of India recommended establishment of this board which consists of a Chairman and two members appointed by the CAG.
