Rule 2 — MSO

2. This volume which is issued in pursuance of the aforesaid provisions replaces the Manual of Standing Orders (Audit) issued in 1991. While audit principles and concepts included in the earlier volume have remained the same, with the changes that have occurred since its issue, it has become necessary to fine-tune the procedures. In May 1994, the IA&AD published its Auditing Standards. Voucher Level Computerisation has largely been implemented in the Accounts and Entitlement offices. There has been considerable exposure to international audit practices while auditing United Nations and allied organisations. This edition incorporates latest instructions issued by my office and wherever possible best international audit practices consistent with IA&AD’s mandate.

2. The C&AG’s (D.P.C.S.) Act under Articles 148 (3) and 149 of the Constitution was passed by Parliament in 1971 to regulate the duties powers and conditions of service of the C&AG of India. Meanwhile, there has been phenomenal growth in plan expenditure arising from tremendous increase in developmental activities of the Government involving core sectors like power, irrigation, industry and agriculture. If Audit has to be meaningful and effective, the audit procedures and practices cannot remain static. Audit should keep itself abreast of the developments that affect it, by updating the techniques of audit from time to time. Accordingly, an effort was made to bring out a revised edition of the Manual. However, this could not be achieved as this work was overtaken by restructuring of the Department, which came into force w.e.f. 1-3-1984. This primary purpose of restructuring was to develop an organisational pattern suited to the altered needs of audit and to improve the maintenance of accounts of the State Government transactions. It was considered unlikely that a composite corpus could develop expertise in such a wide gamut of functions involving totally different areas as wide as works audit and receipt audit, establishment audit and accounts compilation, entitlements functions and autonomous bodies audit, etc. Specialised job needs had to be identified, induction training and placement policies had to be changed to meet the changing requirements and existing skills had to be properly channelised and upgraded if the quality of audit was to be improved. Thus, the composite Accountants General Offices were bifurcated into two distinct offices with separate cadres i.e. Accountant General (Audit) to deal with all audit work and Accountants General (A&E) to deal with the all accounting and entitlement functions. It was also decided to bifurcate the existing M.S.O (Tech) into two separate Manuals viz. M.S.O.(Audit) for Audit Offices and M.S.O.(A&E) for A&E offices. The M.S.O. (Audit), therefore, contains the audit directions, instructions and procedures to be followed by Accountants General (Audit) Offices, The relevant chapters from the M.S.O. (T) have been updated and included in this Manual alongwith some new chapters. In arranging the subjects, generally the pattern of existing M.S.O (T) has been followed.