Regulation 98 — Audit Regulations 2020
Original Rule Text
98. Applicable standards and verifications required in audit of accounts
Where the Comptroller and Auditor General is the sole auditor of a corporation, the financial audit is conducted in accordance with the auditing
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standards issued by the Comptroller and Auditor General. Audit shall verify whether systems and procedures are in place and implemented to ensure that the accounts: (1) comply with the requirements of the applicable law(s), rules and administrative instructions; (2) comply with the accounting standards prescribed by the ICAI; (3) contain adequate disclosures in respect of financial transactions; and (4) present a true and fair view of the corporation’s financial position.
What This Means
When the CAG is the sole auditor of a corporation, the financial audit follows CAG's own auditing standards. The audit must verify four things: compliance with applicable laws and rules, adherence to ICAI accounting standards, adequate disclosure of financial transactions, and whether the accounts present a true and fair view of the corporation's financial position.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1CAG's own auditing standards apply when CAG is the sole auditor
- 2Four key verifications: legal compliance, ICAI standards, adequate disclosures, and true & fair view
- 3Systems and procedures must be in place AND actually implemented — not just on paper
- 4ICAI (Institute of Chartered Accountants of India) accounting standards are the benchmark
- 5This regulation sets the quality bar equivalent to private sector statutory audit standards
Practical Example
The CAG is the sole auditor of Indian Railways. During the annual financial audit, the audit team checks whether Railways' accounts comply with the Railway Act and relevant rules, follow ICAI accounting standards for asset depreciation and revenue recognition, adequately disclose contingent liabilities and related-party transactions, and overall present a true and fair picture of Railways' finances — including its massive pension liabilities.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What are CAG's auditing standards and how do they differ from ICAI standards?▼
Does this regulation apply when the CAG does supplementary audit (not sole audit)?▼
What does 'true and fair view' mean in the context of government corporations?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.