CAG N DAC

2. CAG(Comptroller Of Auditors
General Of India)
DAC(Department of Company
Affairs)

3.  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.

4.  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.

5.  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.

6.  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.

7.  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.

8.  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 Process
o Service regularly
 Company has effective system for identification
of idle labour –hours & idle machine hours.

9.  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.

10.  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 .

11. 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.

12.  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.

13. Ensuring Compliance
Monitoring the development of
professional Bodies.
Co-ordination with other Government
Departments
Settlement of disputes through a Quasi-
Judicial Forum.
Interaction with Monopolies and
Restrictive trade practices.