Para 2.6.14 — MSO (Audit)
Original Rule Text
2.6.14 When the audit of an institution is taken up by the Comptroller and Auditor General, its scope should be determined after taking into account the existing audit arrangements and after making a professional review of the prevalent audit systems. For example, the scope of audit, periodicity of audit, percentage of test check, etc. in relation to local bodies audited by the Examiner of Local Fund Accounts, should be determined in the light of periodical reviews of the adequacy of the audit conducted by him. The audit systems being applied to any class of institutions should be reviewed before taking up
their audit. Such a review has to be supplemented by an occasional audit of individual transactions.
What This Means
When the CAG takes up audit of any institution, the scope of audit is determined by first reviewing the institution's existing audit arrangements and conducting a professional assessment of those audit systems. For bodies already audited by another agency (like the Examiner of Local Fund Accounts), the CAG's audit scope, periodicity, and extent of test checks are calibrated based on how adequate the existing audit is. The review is supplemented by occasional direct examination of individual transactions.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Audit scope is determined after reviewing existing audit arrangements
- 2A professional review of the prevalent audit systems is conducted first
- 3For bodies audited by other agencies, CAG's scope depends on adequacy of existing audit
- 4Periodicity and test-check percentage are adjusted based on the review
- 5Occasional audit of individual transactions supplements the systems review
Practical Example
The CAG takes up audit of a large municipal corporation that is already audited by the state's Examiner of Local Fund Accounts (ELFA). Before starting, the CAG team reviews the ELFA's audit reports, methodology, and coverage for the past three years. They find that ELFA covers financial regularity well but rarely examines procurement efficiency. The CAG therefore focuses its audit scope on procurement and performance aspects, while relying on ELFA's work for routine financial verification, supplemented by occasional test checks of specific transactions.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why does the CAG review existing audit before starting its own?▼
What is an 'occasional audit of individual transactions'?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.