Create a custom practice set
Pick category, difficulty, number of questions, and time limit. Start instantly with your own quiz.
Generate QuizGK Question
The CAG audits Public Sector Undertakings (PSUs) under which provision, and what is the primary objective of such audits?
- Article 149; to ensure profitability of PSUs
- Commercial Corporations (Audit) Act, 1956; to assess economy, efficiency, effectiveness of PSU operations
- Article 266; to verify tax compliance by PSUs
- Article 282; to monitor PSU investments in social sectors
Answer: Commercial Corporations (Audit) Act, 1956; to assess economy, efficiency, effectiveness of PSU operations
CAG audit of PSUs: (a) Legal basis: Commercial Corporations (Audit) Act, 1956 empowers CAG to audit government companies, corporations where government has majority shareholding or substantial control, (b) Audit objectives: (i) Economy: Assess whether resources acquired/used economically (minimizing cost), (ii) Efficiency: Assess whether maximum output achieved with given resources (productivity), (iii) Effectiveness: Assess whether objectives achieved, intended outcomes realized (impact), (c) Applications: (i) Performance audit: CAG examines PSU projects (e.g., power plants, refineries) for cost overruns, delays, operational inefficiencies, (ii) Financial audit: Verify accounts, compliance with accounting standards, laws, (iii) Compliance audit: Verify adherence to procurement rules, environmental regulations, corporate governance, (d) Limitations: (i) Advisory nature: CAG recommendations not binding; implementation depends on management, government, (ii) Commercial confidentiality: Some PSU information may be exempt from public disclosure, (e) Illustrates accountability architecture: CAG audit provides independent assessment of PSU performance; PAC, media, citizens use findings to demand accountability, reforms.