Audit Of Public Sector Undertakings Flashcards
Areas of audit board to review
To conduct comprehensive audit appraisal of the working of PSU’s
To associate experts relevant to appraisals
Discuss finding with the management of the organization for there views on the report
Result of appraised is incorporated by CAG in report
Public accounts committee
That he money disbursed were applied for the intended purpose
The expenditure was authorized
Re appropriation is made according to provisions made
Examine statement of accounts of autonomous or semi autonomous bodies
Estimates committee
Report the economies, efficiency, improvements
Suggest alternative policies
Money well laid out in a limit
In case there is an policy is not leading to the desired result, or is leading to waste, it is duty to bring such to the knowledge of house
Committee of public undertaking
To examine the reports and document of PSU’s
To examine the report of CAG on PSU’s
Whether the PSU’s are being operating with the sound business principles and prudent commercial practices
Any over function vested in PAC and the estimates committee not covered above
CAG role in functioning of committees
CAG reports forms the basis for the committee workings
Scrutinizes the notes which are submitted by the ministries to committees and correctness of such submissions
Present there report in parliament and help committees in making recommendations
If some reports are not discussed but committee obtaining written answers from the department and ministries
Objective and scope of PSU’s audit
Not limited to compliance and financial audit Comprehensive audit Propriety audit Decision taken by competent authority Helping government Fiscal and managerial accountability Highlighting issues
Basic elements of PSU’s audit
Three parties (auditor, responsible party & intended user)
Subject matter, criteria & subject matter information
Types of engagement (attestation & direct reporting engagement)
Performance audit
A performance audit is an objective and systematic evaluation of evidence for the purpose of providing an independent assessment of the performance of the government organization , program, activity or function in order to provide to improve accountability and facilitate decision making by parties with responsibility to oversee and take corrective actions
Economy
Minimizing the cost of resources having regard to appropriate quantity, quality and best price
Efficiency
Input output ratio i.e. When output is maximized at minimum input or input is minimized at and given quantity and quality of output
Other aspects Effective procurement Effective storage Optimum utilization of resources Efficient usage of human, financial and other resources Efficient operating procedures
Effectiveness
Intended impact vs actual impact I.e. Extent to which objectives are BIENG achieved
Other aspects Extent of results achieved Social and Economic impact due to policy Other related programmes (overlaps, complements, duplicates) Complained with L&R Alternative to the programs Ways of improvement
Planning of performance audit
Understanding the entity
Defining objective and scope of the audit
Determine the audit criteria
Deciding audit approach
Audit timetable and resources
Prepare an audit programme
Intimation of the audit programme to audit entities
How to determine audit criteria
Procedure in the manual of the entity
Policies, standards, directives and guidelines
Criteria used by the same entity or any other similar entity
Independent expert opinion
General management
What are the audit approaches that can be used in PSU’s audit?
Analysis of procedure Case studies Use of existing data Surveys Analysis of results Quantitative analysis
Comprehensive audit
Some of the issues examined in comprehensive audit are -
Overall capital cost compared to approve planned cost
Production and operational output achieved
Efficient purchase policy
Planned rate of return
Cost control measures
R&D
