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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 Rajdhani Power Distribution Ltd, a Government company, appointed by the C&AG. After she submits her audit report, the C&AG decides to conduct a supplementary audit. Which statement correctly describes the C&AG's position under the Companies Act, 2013?

The C&AG may conduct a supplementary or test audit of a Government company's accounts and may comment upon or supplement the statutory auditor's report. He cannot revise or replace that report, and no Board consent is needed.

  1. AThe C&AG may conduct a supplementary audit or test audit of the accounts and may comment upon or supplement the auditor's reportCorrect
  2. BThe C&AG can only issue directions to the statutory auditor and cannot himself audit the accounts
  3. CThe C&AG may revise the auditor's report, which then replaces it for all purposes
  4. DThe C&AG may conduct a supplementary audit only if the company's Board consents in writing

Explanation

The Act empowers the C&AG to direct the manner of audit and to conduct a supplementary or test audit. He may comment upon or supplement the audit report, but the statutory auditor's report is not replaced or revised by him. Board consent is not required. The option saying he only gives directions ignores his supplementary audit power.

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