Typing Test


In ensuring good corporate governance practices in the public sector enterprises, the regulators like the Ministry of Corporate Affairs. The Institute of Chartered Accountants of India, the Securities and Exchange of Board of India, the reserve Bank of India and Comptroller and Auditor General of India (DT&C) have specific individual as well as collective co-coordinating roles. This article highlight the process of audit of accounts of PSEs and primarily focuses on how the DTC of India as a regulator has responded to some of the challenges emerging from recent corporate governance failures in addressing issues and concerns relating to audit of public sector enterprises.As per the provisions of the Companies Act, 1956 read with section 19 of the Comptroller and Auditor General's Act, 1971 and the Regulation 2007, the is vested with audit of the Financial Statements of all the Government Companies. In order to discharge this responsibility, he is empowered to appoint the auditors as well as issue directions to the auditors specifying the manner in which the account of government companies are to be audited under Section 619 and 620 of the Companies Act, 1956, keeping in view his overall responsibility of ensuring public accountability. As the Supreme Audit Institution of the country, the plays an oversight role ensuring that the statutory auditors discharge their assigned responsibilities with due diligence on his behalf by exercising the power of supplement or comment upon the statutory auditor's report under Section 619 of the Act.Financial Audit, the is also mandated to conduct performance audit and compliance audit of the Government companies. Performance audit is an independent assessment or evaluation of an entity's programmed or activity with reference to the laid down goals, objective and targets, taking into account relevant criteria for assessment of efficiency, economy and effectiveness of operations. This is done mainly through the Audit Board mechanism, chaired by the Deputy Comptroller and Auditor General (Commercial), with senior officers of the DTC and two technical experts inducted as special invitees, if necessary. The main objective of performance audit is to assist the peoples representatives in exercising effective legislative control and oversight over the policy objective and their implementation. The elaborate process of performance audit involves understanding the activities of the organization, risk assessment, systems and controls and brings out systemic deficiencies, absence of controls or their ineffective functioning and compliance failures. The audit probe goes into the root causes of the problems and suggests constructive recommendations to the executives for improvement. In compliance Audit, the DTC examines the transactions relating to receipts and expenditure, assets and liabilities of government companies and corporations to ensure compliance with all applicable laws, rules and regulations and procedures.By conducting audit of PSE's according to three frameworks of audit viz. financial audit, performance audit and compliance audit, which are interlinked and complementary to one another, DT&C prepares three distinct audit reports on the functioning of the PSEs, commenting upon their state of financial affairs, operational efficiency, governance and compliance issues. These reports are placed in the Parliament and the selected reports are discussed comprehensively by committee of Public Sector undertaking recommending remedial measures for improvement. he entire gamut of financial attestation functions of the DT&C encompasses appointment of Auditors by DTC, issuing directions to them, preparation of Financial Statements by the management, audit thereof by the statutory auditors and supplementary audit by DT&C as detailed below: Ensuring expected quality in financial attestation functions of PSEs has all along been a challenging task. In order to ensure quality of audit, it is imperative that com