Regulation 44 — REGULATIONS_AUDIT

44. Broad framework of Compliance Audit (1) Compliance audit is carried out in accordance with the Auditing Standards, Compliance auditing guidelines and other relevant orders issued by the Comptroller and Auditor General.

(2) Compliance auditing is concerned with

(a) regularity (adherence to formal criteria such as provisions of the Constitution of India, relevant laws, rules, regulations, orders, instructions and agreements etc)

(b) propriety (observance of the general principles, governing sound financial management and the conduct of public officials).

(3) Compliance audit also involves examination of the rules, regulations, orders, transactions and instructions themselves for their legality, adequacy, transparency, propriety and prudence and effectiveness that is whether these are:

(a) intra vires the provisions of the Constitution of India and the laws (legality);

(b) sufficiently comprehensive and ensure effective control over Government receipts, expenditure, assets and liabilities with sufficient safeguards against loss due to waste, misuse, mismanagement, errors, frauds and other irregularities (adequacy);

(c) consistent, clear and free from ambiguity and promote observance of probity in decision making (transparency);

(d) judicious and wise (propriety and prudence); and

(e) implemented in a manner that meets the intended objective

(4) When compliance auditing is part of a performance audit, compliance is seen as one of the aspects of economy, efficiency and effectiveness. Noncompliance may be the cause of, an explanation for, or a consequence of the state of the activities that are the subject matter of the performance audit.