Regulation 81 — Audit Regulations 2020
Original Rule Text
# 81. Responsibility for settlement of audit observations and constitution of Audit Arrears Committee
In case of both Central and State public sector enterprises, the responsibility for settlement of audit observations lies with the Management of the Company. In case a large number of audit observations included in inspection reports remain outstanding for more than two years, each such company shall constitute an Audit Arrears Committee consisting of sufficiently senior officers of the company for speedy settlement and clearance of outstanding audit observations. The concerned Government may take steps to ensure constitution of these committees and their effective functioning.
Regulations on Audit and Accounts 2020
Chapter 8 Audit of Bodies and Authorities
(a) Broad Principles
What This Means
The responsibility for settling audit observations in inspection reports lies with the company's management for both central and state PSUs. If a large number of audit observations remain unresolved for more than two years, the company must form an Audit Arrears Committee with sufficiently senior officers to clear the backlog. The concerned government should ensure these committees are formed and function effectively.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Settlement of audit observations is the company management's responsibility
- 2Applies to both central and state public sector enterprises
- 3If observations remain outstanding for more than 2 years, an Audit Arrears Committee must be formed
- 4Committee must consist of sufficiently senior officers
- 5The government should ensure committee constitution and effective functioning
Practical Example
Indian Oil Corporation has 150 audit observations from inspection reports that are more than two years old. IOC must constitute an Audit Arrears Committee headed by a Director-level officer with senior finance and operational officers as members. The committee meets monthly to review and settle outstanding observations — providing required documents, clarifications, or implementing corrective actions. The Ministry of Petroleum monitors the committee's progress.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What does 'settlement' of audit observations mean?▼
Why is the two-year threshold important?▼
What role does the government play in this process?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.