10-04-2013, 04:33 PM
GOVERNMENT AUDITING
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Introduction
Mandate
The Comptroller and Auditor General of India (CAG), who is the head of the Supreme
Audit Institution of India (SAI) derives his duties and powers mainly from Articles 149 to
151 of the Constitution of India and the Comptroller and Auditor General's (Duties, Powers
and Conditions of Service) Act, 1971. Under the provisions of the Constitution of India and
the Act, the CAG is the sole auditor of the accounts of the Central (Union) Government and
the State Governments. CAG is also responsible for the audit of local bodies (i.e. Panchayati
Raj institutions and urban local bodies) under the provisions of some of the State Acts and
provides technical and administrative guidance for accounting and audit functions in all
States as per orders issued by Ministry of Finance, Government of India. The reports of the
CAG relating to the accounts of the Union and the States are submitted to the
President/Governor of the State for being laid before the Parliament/State Legislature. The
CAG is also responsible for ensuring a uniform policy of accounting and audit in the
Government sector as a whole. The Act authorises the CAG to lay down for the guidance of
the Government departments, the general principles of Government accounting and the
broad principles in regard to audit of receipts and expenditure.
Auditing Standards
Auditing Standards prescribe the norms of principles and practices, which the Auditors
are expected to follow in the conduct of Audit. They provide minimum guidance to the
Auditor that helps determine the extent of auditing steps and procedures that should be
applied in the audit and constitute the criteria or yardstick against which the quality of audit
results are evaluated.
The auditing standards of the International Organisation of Supreme Audit Institutions
(INTOSAI) have been suitably adapted with due consideration of the Constitution of India,
relevant Statutes and rules for the auditing standards for the Supreme Audit Institution of
India (SAI).
Basic Postulates
The basic postulates for auditing standards are basic assumptions, consistent
premises, logical principles and requirements which help in developing auditing standards
and serve the auditors in forming their opinions and reports, particularly in cases where no
specific standards apply.
The basic postulates are:
(a) The SAI should comply with the INTOSAI auditing standards in all matters that are
deemed material.
(b) The SAI should apply its own judgement to the diverse situations that arise in the
course of Government auditing.
© With increased public consciousness, the demand for public accountability of persons or
entities managing public resources has become increasingly evident so that there is a need
for the accountability process to be in place and operating effectively.
(d) Development of adequate information, control, evaluation and reporting systems within
the Government will facilitate the accountability process, Management is responsible for
correctness and sufficiency of the form and content of the financial reports and other
information.