Para 2.6.15 — MSO (Audit)
Original Rule Text
2.6.15 The adequacy of the existing audit arrangements in respect of an institution is to be judged by
(i) the regularity with which it is audited;
(ii) the coverage of such audit,
(iii) the qualifications and expertise of the audit personnel;
(iv) their independence;
(v) the promptness in reporting the audit findings;
(vi) the quality of reporting; and
(vii) the action taken by the authorities to whom the audit findings are reported. Attention of the appropriate authorities should be drawn where the audit arrangements are not adequate and, if need be and permissible, the audit should be taken up by the Comptroller and Auditor General. It is not essential for him to take up detailed audit in cases where the audit arrangements are found to be adequate.
What This Means
To judge whether an institution's existing audit arrangements are adequate, seven criteria are used: regularity of audits, coverage of the audit, qualifications and expertise of audit staff, their independence from the institution, promptness in reporting findings, quality of the audit reports, and the action taken on reported findings. If the audit arrangements are found inadequate, the CAG should alert the relevant authorities and may take up direct audit if permissible and necessary.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Seven criteria for judging adequacy: regularity, coverage, qualifications, independence, promptness, quality, and follow-up action
- 2Inadequate audit arrangements should be flagged to appropriate authorities
- 3CAG may take up direct audit if existing arrangements are inadequate and it is permissible
- 4Detailed CAG audit is not required where existing arrangements are found adequate
- 5This framework ensures proportionate use of CAG's audit resources
Practical Example
The CAG reviews the audit arrangements of a central university receiving Rs 500 crore in government grants. The review reveals: audits are conducted every year (regular), but coverage is only 30% of expenditure; the auditor is a junior-level officer without professional qualifications; audit reports take 18 months to finalize; and follow-up action on past findings is minimal. Based on these findings, the CAG determines the existing audit is inadequate and decides to conduct a detailed audit focusing on grant utilization and procurement practices.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'independence' of audit personnel mean?▼
Does the CAG audit all institutions where audit arrangements are inadequate?▼
What happens if the existing audit is found adequate?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.