Para 1.1.11 — MSO (Audit)
Original Rule Text
1.1.11 Section 19 of the Act deals with the duties and powers of the Comptroller and Auditor General in relation to the audit of the accounts of Government Companies and Corporations. These duties and powers are to be performed and exercised under Subsections (1) and (2) of Section 19:
(i) in the case of Government Companies, in accordance with the provisions of the Companies Act, 1956 contained in Sections 617 and 619 thereof; and
(ii) in the case other Corporations set up by or under law made by the Parliament, in accordance with provisions of the respective Legislations.
However, the position of a Corporation established by a law made by the Legislature of a State or of a Union Territory is different. Under the Constitution, only Parliament can prescribe by law the duties and powers of the Comptroller and Auditor General. Sub-section (3) of Section 19 of the Act provides that audit of a Corporation established by law by the Legislature of a State or Union Territory can be entrusted to the Comptroller and Auditor General in the public interest by the Governor of the State or the Administrator of the Union Territory concerned after consultation with the Comptroller and Auditor General and after giving a reasonable opportunity to the concerned Corporation to make representations in respect of the proposal for such audit.
What This Means
Section 19 of the CAG Act deals with auditing government companies and corporations. For government companies, the CAG follows the Companies Act provisions (Sections 617 and 619). For central corporations, the CAG follows the respective legislation. State-level corporations are different — the Governor can entrust their audit to the CAG in the public interest, but only after consulting the CAG and giving the corporation a chance to respond.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Section 19 governs CAG's audit of government companies and corporations
- 2Government companies are audited per the Companies Act (Sections 617, 619)
- 3Central corporations are audited per their respective enabling legislation
- 4State corporations can be audited by CAG only if the Governor entrusts audit in public interest
- 5State corporations must be consulted before audit is entrusted
Practical Example
When a state government creates a new food processing corporation by state legislation, the CAG cannot automatically audit it. The Governor must first consult the CAG, give the corporation a chance to make representations about the proposed audit, and then formally entrust the audit — all done in the public interest.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Does the CAG automatically audit all government companies?▼
What is the difference between a government company and a corporation under Section 19?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.