Regulation 68 — Audit Regulations 2020
Original Rule Text
# 68. Scope of Supplementary Audit
It is the statutory auditor who is primarily responsible for expressing an opinion on the accounts of the company. Supplementary audit of the accounts by the Comptroller and Auditor General is, by its very definition, mainly an instrument of quality control of financial audit of accounts that begins with careful selection of the statutory auditor and continues with the ongoing oversight of his work including review of the conclusions drawn in his audit report. The scope of supplementary audit of annual accounts of a Government company and any other company by the Comptroller and Auditor General shall include an examination of selected accounting records and a review of the audit report of the statutory auditor including the opinion expressed by him on the annual accounts of the company.
What This Means
The statutory auditor bears primary responsibility for the audit opinion on company accounts. The CAG's supplementary audit is essentially a quality control mechanism — it starts with selecting the right statutory auditor, continues with overseeing their work, and culminates in reviewing their audit report. The supplementary audit involves examining selected accounting records and reviewing the statutory auditor's report and opinion on the annual accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Supplementary audit is primarily a quality control instrument over the statutory audit
- 2The quality control cycle begins with statutory auditor selection
- 3It includes ongoing oversight of the statutory auditor's work
- 4Scope covers examination of selected accounting records
- 5The statutory auditor's report and opinion are also reviewed
- 6Primary responsibility for the audit opinion remains with the statutory auditor
Practical Example
For BPCL's annual accounts, the statutory auditor issues an unqualified opinion. During supplementary audit, the AG (Audit) team selects key areas like inventory valuation (given BPCL's massive petroleum stocks) and revenue recognition for review. They examine whether the statutory auditor's working papers adequately support the unqualified opinion and whether the conclusions on these high-risk areas are justified. If gaps are found, CAG issues comments.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Does the CAG re-audit the entire accounts during supplementary audit?▼
Can CAG change the statutory auditor's opinion through supplementary audit?▼
How does supplementary audit differ from test audit?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.