Regulation 60 — Audit Regulations 2020
Original Rule Text
60. Responsibility with reference to annual accounts
While the statutory auditor is responsible for forming an expressing an opinion on the annual accounts of the Government Company or any other company, the responsibility for their proper preparation is that of the management of the company. The audit if the annual accounts does not relieve the management of its responsibilities relating to the maintenance of adequate accounting records, internal controls and safeguarding the assets of the company.
What This Means
The statutory auditor's job is to form and express an opinion on the annual accounts of a government company. However, the responsibility for preparing those accounts correctly lies with the company's management. The audit does not relieve management of its duty to maintain proper accounting records, implement internal controls, and safeguard company assets.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Statutory auditor is responsible for the audit opinion, not for preparing accounts
- 2Company management is responsible for proper preparation of annual accounts
- 3Management must maintain adequate accounting records regardless of audit
- 4Internal controls are management's responsibility, not the auditor's
- 5Safeguarding company assets remains management's duty even after audit
Practical Example
The management of NTPC Ltd prepares its annual financial statements showing revenue, expenses, assets, and liabilities. The statutory auditor examines these statements and gives an opinion on whether they present a true and fair view. If later, misappropriation of assets is discovered, the management cannot blame the auditor — maintaining internal controls to prevent such misappropriation was always management's responsibility.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
If the auditor certifies the accounts, does it mean management is cleared of responsibility?▼
What if the auditor discovers errors in the accounts?▼
Does this regulation apply to CAG's supplementary audit as well?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.