GOOD MORNINGTO ONE AND ALL

TOPIC NAME:-CAG(Comptroller Of Auditors General Of India)

DAC(Department of Company Affairs)

MEANING:The comptroller & auditor general of india plays

a very important role in the government audit.The Comptroller and Auditor General Act Passed

by Parliament in1971 & amended in 1976.Lays down duties and rights of CAG.The accounts of the union and state

governments shall be kept in such form as the president may, on the advice of the CAG.

CAG (Comptroller & Auditor General Of India):

System of accounts. System of financial control. Assets and Investments. Liabilities and loans. Profit and loss account. Inventory and contracting. Costing. Internal audit. Audit committee.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

SYSTEM OF ACCOUNTS:- To examine the system & give the views as regards

their deficiencies & suggestions for remedial measures.

Whether expenditure during construction is appropriately accounted.

Allocation between capital and revenue expenditure. Are the banks accounts of the company reconciled

regularly. Examine the accounting policies of the company are

these conformity with the accounting standards.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

System of Financial Control: Examine the delegation of financial powers. Indicate whether the credit obtained. Assets and Investments: The assets dates and installation & commission clearly

fixed by the authority. Whether the property and assets registers is up-to-date &

reconciled with financial books. Examine and indicate whether the company has a

system of monitoring the timely recovery of outstanding dues.

Whether the cash and imprest balance were verified during the year & regular basis by an authorized officer.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

Liabilities & loans Profit & loss accounts: Does the company provide segment-wise reporting. If yes then it also provide loss making segments also. Inventory contracting: Company usually make advance payment to

supplier/contractors. Maximum & minimum limits of stores and spares etc. Economic order quantity for procurement of stores.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

Costing: Does the company prepare cost accounts &

reconcile with financial accounts. Whether the company is following proper system

of costing & computing;o Jobs o Products o Processo Service regularly Company has effective system for identification

of idle labour –hours & idle machine hours.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

Internal audit: Give comments on internal audit system: Reporting status, Scope & work, Level of competence,etc. are adequate.Audit committee:

If company has an audit committee of BOD(board of directors) so give comments on functioning.

Directions of CAG U/S 619(3)(a) of the companies act in respect of government companies are as follows

To inspect any office of accounts under the control of the union or state government.

To require that any accounts, books, papers and other documents which deal with transaction under audit be sent to specified places.

To put such questions or make such observation that he may consider and ask to the officer also.

It is duty to make reports .

POWERS OF CAG

Department Of Company Affairs:-

This is a declaration of mission , values and standards and commitment to

achieve excellence in the formulation and implementation of policies and

procedures of department of company affairs for the benefit of public, investors

and corporate sector, who are partners in progress.

Department of company affairs provides:-

Legal Framework for incorporation. Redressal For Grievances of investors, creditors and

others. Dissemination of information Interaction with professional bodies and business

community. Maintaining in the offices of registrar of companies. Surveillance Over the working of corporate sector. Investigation into the affairs of the companies. Prescribing the cost audit rules.

Ensuring ComplianceMonitoring the development of professional Bodies.Co-ordination with other Government DepartmentsSettlement of disputes through a Quasi- Judicial Forum.Interaction with Monopolies and Restrictive trade practices.