Para 2.6.24 — MSO (Audit)
Original Rule Text
2.6.24 It is necessary to examine whether appropriate and adequate systems and procedures are in place for:
(i) proper accounting of receipts, expenditure and assets;
(ii) monitoring of unrealized revenues and undischarged liabilities;
(iii) general control over expenditure;
(iv) sanctions to expenditure, remission of revenues and transfer/disposal of assets;
(v) safe custody of cash, stores and other assets; and
(vi) purchases and conclusion of contracts.
What This Means
Auditors must examine whether the institution being audited has proper systems in place for six critical areas: accounting for receipts, expenditure and assets; tracking unrealized revenue and unpaid liabilities; controlling expenditure; approving spending and asset disposals; safeguarding cash, stores and other assets; and managing purchases and contracts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Proper accounting of receipts, expenditure, and assets must be verified
- 2Systems for monitoring unrealized revenues and undischarged liabilities must exist
- 3General expenditure control mechanisms must be in place
- 4Sanctions for expenditure, revenue remission, and asset transfers must be checked
- 5Safe custody of cash, stores, and assets must be ensured
- 6Purchase and contract procedures must be examined
Practical Example
An audit team evaluating an autonomous educational institution checks whether it maintains a fixed asset register (asset accounting), tracks unpaid fees from students (unrealized revenues), has a delegation of financial powers document (expenditure control), follows GFR rules for procurement above Rs 25,000 (purchase procedures), and conducts periodic physical verification of laboratory equipment (safe custody of assets).
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Is this a checklist that must be followed for every audit?▼
What does the auditor do if systems are found inadequate?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.