Skip to content

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

CA Tarun is the C&AG-appointed auditor of Sagar Ports Ltd., a Government company. He has completed his audit and issued an unmodified opinion. The C&AG then orders a supplementary audit and comments upon the audit report. The company's management claims the supplementary audit changes the auditor's liability and the C&AG's comments should be kept out of the annual report. What is the correct position?

The C&AG's comments or supplement must be laid before the general meeting along with the statutory auditor's report. A supplementary audit adds to the statutory audit and does not replace it, so the auditor remains responsible for his own opinion, and management cannot suppress the comments.

  1. AThe C&AG's comments must be placed before the general meeting along with the audit report, and the supplementary audit does not remove the auditor's own responsibility for his opinionCorrect
  2. BThe C&AG's comments are confidential and must be sent only to the Central Government
  3. CThe supplementary audit replaces the statutory auditor's report, so the auditor ceases to be responsible
  4. DThe C&AG's comments need be placed only if the auditor agrees with them

Explanation

Under the Companies Act, the C&AG's comments or supplement on the audit report are sent to the company and placed before the annual general meeting along with the auditor's report. The supplementary audit is in addition to, not in place of, the statutory auditor's work, so the auditor remains responsible. The auditor's agreement is not a precondition for placing the comments.

Did you get it right without looking?

One question tells you little. A timed set on Overview of Audit of Public Sector Undertakings shows your real accuracy, how long you take and where you lose marks.

Practise Overview of Audit of Public Sector UndertakingsFree diagnostic mock

More Overview of Audit of Public Sector Undertakings questions