Para 2.6.13 — MSO (Audit)
Original Rule Text
2.6.13 In cases where the rules, regulations, articles of association, etc. of any body or authority incorporate the duties and powers of Comptroller and Auditor General in regard to the audit of its accounts, it should be seen that they are stated in discretionary, as opposed to mandatory, terms. There will not be any objection to the conditions of any grant, loan or investment including the stipulation that an auditor may be appointed on the advice of the Comptroller and Auditor General. The appointment of a chartered accountant as an auditor can be recommended even if the audit is not entrusted to the Comptroller and Auditor General.
What This Means
When a body's rules, regulations, or articles incorporate provisions about the CAG's audit duties and powers, these must be worded in discretionary terms (giving the CAG the option to audit) rather than mandatory terms (requiring the CAG to audit). Grant or loan conditions can include a stipulation that an auditor may be appointed on the CAG's advice. Even if the CAG does not directly audit a body, a chartered accountant can be recommended as the auditor.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1CAG's audit duties in body's rules must be stated in discretionary, not mandatory, terms
- 2Grant/loan conditions can stipulate auditor appointment on CAG's advice
- 3A chartered accountant auditor can be recommended even without direct CAG audit
- 4This preserves the CAG's constitutional independence in choosing when and how to audit
- 5Bodies should not frame rules that impose audit obligations on the CAG without consent
Practical Example
A government-funded autonomous institute drafts its financial regulations and includes a clause saying 'The accounts of the Institute shall be audited by the CAG.' The CAG's office reviews the draft and advises the institute to change the wording to 'The accounts of the Institute may be audited by the CAG.' This ensures the CAG retains discretion over whether to take up the audit based on available resources and priorities, rather than being obligated by the institute's own rules.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why must CAG's audit provisions be discretionary rather than mandatory?▼
Can the CAG recommend a chartered accountant for a body it does not audit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.