Page 311 - CA Final PARAM Digital Book.

Answer The above areas for which statutory auditors of PSU were required to examine, report and indicate impact
of these matters in financial statements are likely to relate to directions issued by C&AG to statutory
auditors under section 143(5) of Companies Act, 2013.

In terms of section 143(5), in case of a government company, the C&AG has the power to direct the auditor
the manners in which accounts of company are required to be audited and auditor shall submit audit report
which among other things, include the directions, if any, issued by the C&AG the action taken thereon and
its impact on the accounts and financial statements of the company.

QNO Estimates Committee Old Course – (N23M)
597.800 TITANIUM CNO -- PSU.040

The Comptroller & Auditor General of India plays a key role in functioning of financial committees of
Parliament and state legislatures. Therefore, he has come to be recognized as a friend, philosopher and

guide of committees. Discuss how such a role is ensured in practice. Also, briefly discuss the functions of
“Estimates Committee” of Parliament.

Answer The Comptroller & Auditor General of India plays a key role in the functioning of the financial committees of
Parliament and the State Legislatures. He has come to be recognised as a 'friend, philosopher and guide' of
the Committees. It is ensured as follows: -
(i) His reports generally form the basis of the Committees' working, although they are not
precluded from examining issues not brought out in his reports.

(ii) He scrutinises the notes which the Ministries submit to the Committees and helps the
Committees to check the correctness of submissions to the Committees and facts and figures in
their draft reports.

(iii) The financial Committees present their report to the Parliament/ State Legislature with their
observations and recommendations.

The various Ministries / Department of the Government are required to inform the Committees
of the action taken by them on the recommendations of the Committees (which are generally
accepted) and the Committees present Action Taken Reports to Parliament / Legislature

(iv) In respect of those audit reports, which could not be discussed in detail by the committees’,
written answers are obtained from the Department / Ministry concerned and are sometimes
incorporated in the Reports presented to the Parliament / State Legislature.

This ensures that the audit reports are not taken lightly by the Government, even if the entire
report is not deliberated upon by the Committee.

The functions of “Estimates Committee” are: -

(i) to report what economies, improvements in organization, efficiency or administrative
reform, consistent with the policy underlying the estimates may be effected.
(ii) to suggest alternative policies
(iii) to examine whether the money is well laid out within the limit and
(iv) to suggest the form in which the estimates shall be presented to Parliament.

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