Regulation 157 — Audit Regulations 2020

Audit Regulations 2020regulations-audit

157. Methods and techniques for evidence including technology and data analytics
Methods of obtaining audit evidence include physical inspection/joint physical inspection, observation, inquiry, confirmation, recalculation, re-performance, analytical procedures and/or other research techniques. Audit may use IT assisted data analytics and techniques and other IT tools as appropriate for collection and evaluation of evidence. Audit may also use remote sensing, Geographic Information System (GIS), aerial surveys and other technology enabled techniques, as appropriate.

What This Means

Audit can use a wide range of methods and technologies to collect and evaluate evidence. Traditional methods include physical inspection, observation, inquiry, confirmation from third parties, recalculation, re-performance of procedures, and analytical techniques. Modern methods explicitly authorized include IT-assisted data analytics, remote sensing, Geographic Information System (GIS), aerial surveys, and other technology-enabled techniques. This regulation ensures audit keeps pace with technological advances.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

1Traditional audit methods include inspection, observation, inquiry, confirmation, and recalculation
2IT-assisted data analytics and tools are explicitly authorized for audit evidence
3Remote sensing and GIS technology can be used for evidence collection
4Aerial surveys are an accepted audit technique
5Joint physical inspection (with the entity) is a recognized method
6The regulation is forward-looking — 'other technology enabled techniques' covers future innovations

Practical Example

The CAG's audit of the PM Awas Yojana (Housing for All) uses GIS mapping and satellite imagery to verify whether houses reported as constructed actually exist at the claimed GPS coordinates. The audit team overlays the scheme's MIS data on satellite images and identifies 500 locations where no construction is visible despite payments having been made. This technology-enabled evidence is supplemented by physical inspection of a sample of sites. The data analytics team also runs algorithms on the beneficiary database to detect duplicate Aadhaar numbers and ghost beneficiaries.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

Can audit use drones for aerial surveys?▼

Yes. The regulation permits 'aerial surveys and other technology enabled techniques,' which would include drone-based surveys subject to applicable civil aviation regulations. The CAG has increasingly used drone surveys for audits of infrastructure and environmental compliance.

Is the auditable entity required to provide data in electronic format for data analytics?▼

Under Regulation 155, audit determines the form and type of data required. If audit needs electronic data for analytics, the auditable entity must provide it. Other regulations on access to IT systems also support this requirement.

What is the difference between 'recalculation' and 're-performance'?▼

Recalculation means the auditor independently checks mathematical computations (e.g., verifying bill calculations). Re-performance means the auditor independently executes procedures originally performed by the entity (e.g., re-running a procurement evaluation to verify scores given to bidders).

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Regulation 157 — Audit Regulations 2020

Original Rule Text

What This Means

Key Points

Practical Example

Frequently Asked Questions

Related Rules