Financial Audit
Functions
- Financial Audit
- Introduction, Section & Function
Financial Audit focuses on determining whether an entity’s financial information is presented in accordance with the applicable financial reporting and regulatory framework. This is accomplished by obtaining sufficient and appropriate audit evidence to enable the auditor to express an opinion as to whether the financial information is free from material misstatement due to fraud or error.
In respect of Government Companies (Audit u/s 19 (1) of the C& AG DPC Act 1971), the Statutory Auditor appointed by the Comptroller & Auditor General of India under Section 139 (5)/ (7) of the Companies Act 2013 is responsible for expressing an opinion on the financial statements. The Comptroller & Auditor General conducts a supplementary audit under Section 143 (6) (a) of the Companies Act 2013, of the Financial Statements of the Company and shall comment upon or supplement such report within sixty days from the date of receipt of audit report under section 143 (6) (b). The significant and material observations made in the supplementary audit shall be issued as Comments of the Comptroller & Auditor General under the Companies Act 2013, after due consideration of the views, if any, of the statutory auditor and the Management of the Company.
As per Hqrs, the Certification/Accounts Audit is conducted by the C & AG in accordance with CAG’s Auditing Standards, 2017, and also in accordance with Generally Accounting Standards/Auditing Standards issued by the Institute of Chartered Accountants of India/Indian Accounting Standards as applicable, as notified under the provisions of Companies Act 2013 and the Companies (Audit and Accounts) Rules, as amended from time to time. Hqrs also prescribed the checklist for Accounting Standards (vide Hqrs letter no. 153-CA-IV/74-2006 dated 14 March 2007) and Ind AS (vide Hqrs letter no. CA-II/Trng/Ind AS/05-2016/Vol.IV/38 dated 27 May 2019) which are also used during the course of certification audit.
Hqrs revised (January 2011) the criteria for selection of CPSU for supplementary audit of annual accounts whereby all companies with turnover of Rs.5000 crore or more or with paid capital of ₹ 500 crore are to be compulsorily selected each year and other CPSUs to be taken up at least once in five years. However, this office selects these accounts once in three years.
In order to complete the certification of accounts of the companies within 60 days from the date of receipt of audited accounts as provided under Companies Act 2013, in the month of February every year, D.O. letters are issued by Director General to the Chief Executive Officers of each of the auditee Companies under the audit jurisdiction of this Office proposed time schedule for submission of Company’s audited financial statements along with statutory auditors’ report, so as to plan and manage the limited human resources of this office for effective deployment in the financial attest audit and to adhere to timeline.