Regulation 159 — Audit Regulations 2020
Original Rule Text
# 159. Conduct of physical verification on request of Audit
Where necessary, Audit may require the auditable entity to conduct physical verification of stores/inventory/stocks, assets, capital works including capital works in progress, services and deliverables in any form in the presence of the audit officer. Any such request shall be made with the approval of the Accountant General (Audit).
Regulations on Audit and Accounts 2020 84
Chapter 14 General Principles of Government Accounting
What This Means
Audit can require the auditable entity to conduct physical verification of its stores, inventory, stocks, assets, capital works (including works in progress), services, and deliverables — in the presence of an audit officer. This means the entity does the counting or inspection while the auditor observes and verifies. Any such request must be made with the AG's approval. This is a powerful tool for detecting discrepancies between records and actual physical assets.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Audit can require the entity to conduct physical verification in the auditor's presence
- 2Covers stores, inventory, stocks, assets, capital works, services, and deliverables
- 3Capital works in progress are specifically included
- 4The request must be approved by the Accountant General (Audit)
- 5The entity conducts the verification; the auditor observes and records
Practical Example
During an audit of the Central Warehouse Corporation godown in Hapur, the audit team suspects that the quantity of wheat shown in stock registers differs from actual physical stock. With the AG's approval, the audit team requests the Warehouse Manager to conduct a complete physical verification of all wheat stocks in the godown in the presence of the audit officer. The verification reveals a shortage of 200 metric tonnes, supporting the audit finding of pilferage. The results, jointly signed by the warehouse staff and audit officer, form key evidence.
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 entity conduct the verification rather than the auditor?▼
Can this be requested for services and deliverables, not just physical goods?▼
What if the entity's physical verification reveals no discrepancies?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.