Tuesday, 31 December 2019

Unit 10: Government and Independent Financial Audit


Unit 10: Government and Independent Financial Audit:

The Indian Audit and Accounts Department, functioning under the Comptroller and Auditor General, derives its authority and the powers for performance of its duties on his or her behalf under the provisions of Section of 21 of the CAG’s DPC Act, 1971.

Audit forms an indispensable part of the financial administration and is one of the important organs necessary to ensure the sound functioning of a Parliamentary Democracy.

The primary function of audit is to verify the accuracy and completeness of accounts.

It is the function of audit to verify that financial rules and orders satisfy the provisions of Law and or otherwise free audit objections and the rules and orders are properly applied.

Government audit aims to ensure accountability of the executive in respect of public revenue and expenditure.

According to section 617 of the Companies Act, a government company is one in which not less than fifty-one per cent of the paid up share capital is held by the Government.

Integrity and objectivity are maintained when auditors perform their work and make decisions that are consistent with the broader interest of those relying on the auditors’ report, including the public.

A Government Financial Audit or an audit of financial statements is the verification of the financial statements of a legal entity, with a view to express an audit opinion.

While performing independent financial audit the statutory auditors observe the Code of Ethics for Professional Accountants, adopted by the International Federation of Accountants.

The documentation of the independent financial audit and the procedures on its implementation are performed in compliance with the requirements of the legislation in force and the International auditing standards.

The personal seal of the statutory auditor and the seal of the specialized audit firm are used for verification of the audit of the financial accounts and in other cases envisaged by the law.

Auditing Standards Board: The Auditing Standards Board (ASB) is the AICPA's senior committee for auditing, attestation, and quality control applicable to the performance and issuance of audit and attestation reports for non-issuers.

Comptroller and Auditor General: Audits and assists the state and central institutions on their accounts and accountability.

Financial Transactions: Financial transactions are transactions in financial assets and liabilities between institutional units, and between them and the rest of the world.

Government Audit: A systematic examination of financial or accounting records by a specialized inspector, called an auditor, to verify their accuracy and truthfulness.

Government Auditing Standards: The set of accounting standards for performance audits and financial audits of government agencies, produced by the Government Accountability Office.

Indian Audit and Accounts Department: IAAS or Indian Audit and Accounts Service are an Indian Central Government service, free of control from any executive authority, under the Comptroller and Auditor General of India.

Paid up Share Capital: The amount of money stockholders have paid for the issued capital shares of stock.

Statutory Auditor: A legally required review of the accuracy of a company's or government's financial records.

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