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CA Final · Advanced Auditing, Assurance and Professional Ethics · Overview of Audit of Public Sector Undertakings

CA Meera is the statutory auditor of Himgiri Power Corporation Ltd, a Government company, appointed by the C&AG. After she submits her audit report, what is the C&AG's power regarding the audit under the Companies Act, 2013?

The C&AG can give directions to the statutory auditor about how the audit is conducted, and can carry out a supplementary audit or comment on or supplement the audit report. The auditor's independence does not remove these statutory powers, which apply to Government companies.

  1. AThe C&AG may only comment on the report if the company's Board requests it
  2. BThe C&AG can direct the manner in which accounts are audited and give directions to the auditor, and may conduct a supplementary audit or comment upon the audit reportCorrect
  3. CThe C&AG may replace the auditor only after the annual general meeting approves the removal
  4. DThe C&AG has no role after appointment, as the auditor is independent

Explanation

The C&AG may issue directions to the statutory auditor on the manner of auditing, and the auditor must report on the action taken. The C&AG can also conduct a supplementary audit and comment upon or supplement the audit report. The option saying there is no role after appointment ignores these powers, and a Board request is not needed.

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