Indian Railway Codes and Manuals-Finance code-Vol-I-Chapter- 9 (IX)
CHAPTER IX
Statutory Audit
901. Comptroller
and Auditor General of India- Comptroller and Auditor General of
India is an authority sui generis created by the Constitution of India for
conducting audit of the accounts of the Union, the States and the Union
Territories. His functions are derived in the main from Articles 149 to 151 of
the Constitution and these have been further defined by the Comptroller and
Auditor General's (Duties, Powers and Conditions of Service) Act-1971 which
came into force from 15th December, 1971 and the amendment Act, 1976 which came
into force from 1st March, 1976. This enactment lays down in detail his duties,
powers and conditions of service. According to these Acts his duties area) to
audit all expenditure from the Consolidated Fund of India and of each State and
of each Union Territory having a Legislative Assembly and to ascertain, whether
the moneys shown in the accounts as having been disbursed were legally
available for, and applicable to, the service or purpose to which they have
been applied or charged and whether the expenditure conforms to the authority
which governs it;
b) to audit all transactions of the union and of the
States relating to Contingency Funds and Public Accounts.
c) to audit all trading, manufacturing, profit and
loss accounts and balance sheets and other subsidiary accounts kept in any
Department of the Union or of a State and in each case to report on the
expenditure, transactions or accounts so audited by him.
902. It is also the duty of the Comptroller and
Auditor General to audit all receipts which are payable into the Consolidated
Fund of India and of each State and of each Union Territory having a
Legislative Assembly and to satisfy himself that the rules and procedures in
that behalf are designed to secure an effective check on the assessment,
collection and proper allocation of revenue and are being duly observed and to
make for this purpose, such examination of the accounts as he thinks fit and
report thereon.
903. He also has authority to audit and report on
the accounts of stores and stock kept in any department of the Union or of a
State.
904. He has, in connection with the performance of
his duties, authority- 3
a) to inspect any office of accounts under the
control of the Union or of a State, including treasuries and such offices
responsible for keeping of Initial or subsidiary accounts, as submit accounts
to him;
b) to require that any accounts, books, papers and
other documents which deal with or form the basis of or are otherwise relevant
to the transactions to which his duties in respect of audit extend, shall be
sent to such place as he may appoint for his inspection ;
c) to put such questions or make such observations
as he may consider necessary to the person in charge of the office and to call
for such information as he may require for preparation of any account or
report.
905. The Act of 1971 read with amendment Act, 1976
also contains provisions about audit by Comptroller and Auditor General of
authorities and bodies substantially financed from the revenues of the Union or
States or the Union Territories. It also specifies his functions in the case of
grants or loans to outside authorities or bodies. It also provides for
entrustment to him of audit of accounts of authorities or bodies by the
President, the 'Governor of a State or the Administrator of a Union Territory
subject to certain conditions. His duties and powers in relation to audit of
the accounts of Government companies are defined in the Companies Act 1956. He
conducts audit of the accounts of Corporations established by or under law made
by Parliament in accordance with the provisions of the respective enactments.
906. Under Article 150 of the Constitution, the
accounts of Union and State Governments shall be kept in such forms as the
Comptroller and Auditor General of India may, with the, approval of the
President, prescribe. Article 279 of the Constitution provides that the
Comptroller and Auditor General of India shall ascertain and certify the
"net proceeds" of any tax or duty collected by the Government of
India but which are assigned partly or in full to the States in terms of Part
XII of the Constitution of India.
907. His oath of office requires him to uphold the
Constitution and the laws and to discharge his duties without fear or favour,
affection or ill-will. The Constitution safeguards the independence and freedom
of the Comptroller and Auditor General in a variety of ways. Article 148 of the
Constitution provides that the Comptroller and Auditor General shall be
appointed by the President under his hand and seal and shall only be removed
from office in like manner and onthe like ground as a Judge of the Supreme
Court. It also provides that he would not be eligible for any other office
either under the Government of India or the Government of any State and that
the administrative expenses of his office, including all salaries, allowances
and pensions payable to or in respect of persons serving in that office, shall
be charged 4 upon the Consolidated Fund of India.
908. The scope and extent of audit are determined by
the Comptroller and Auditor General at his discretion.
909. Railway
Accounts- Separation from Audit -As stated in para 104, the
process of separation of accounting and auditing functions on the Railways was
completed in 1929 as a sequel to one of the recommendations of the Acworth
Committee. Under this arrangement, the Comptroller and Auditor-General has been
relieved of the responsibility for compiling the accounts of Railway
department. His responsibility for statutory audit of the accounts of Indian
Railways is the same as that for the other departments of the Government of
India.
910. Director of
Railway Audit -The responsibility of the Comptroller and Auditor
General for audit of Railway accounts is discharged through the Deputy
Comptroller and Auditor-General of India (Railways) who conducts the audit on
behalf of and under the direction of Comptroller and Auditor General. He is
assisted by Principal Director of Audit posted at head-quarters of the Zonal
Railways/Production Units.
911. One important object of statutory audit for the
Railways is to ensure that the systemof accounts adopted and used in the
Accounts Department of the Railways is suitable and that the check by the
internal check mechanism is sufficient, that the accounts are maintained and
the checks applied with accuracy and that arrangements exist in the Railways
Accounts offices to ensure attention to the financial interests of Railways.
This object is secured by a test check applied to the vouchers and connected
accounts records of the Accounts Department and by inspections on the spot of
initial records and documents in the offices in which the transactions
originate. The Railway officers should afford all facilities to statutory Audit
officers in the discharge of their duties.
912. The Deputy Comptroller and Auditor-General of
India (Railways), is responsible for scrutinising the adequacy and suitability
of all instructions governing compilation of the accounts of Railways and the
internal check procedures, whether those instructions be in the form of Codes
or otherwise. He is to satisfy himself that such instructions are consistent
with the relevant statutory rules and facilitate conduct of an effective audit
thereof. He is also responsible for scrutinising the Railway portion of the
Finance Accounts of the Union Government including Annual Review of Balances
Compiled by the Railway Board (Accounts). He also examines the Appropriation
Accounts prepared by the Railway Board for certifying their accuracy and
prepares the Audit Report (Union Government-Railways) of the Comptroller and 5
Auditor – General of India.
913. The Deputy Comptroller and Auditor-General
(Railways) is responsible for audit ofi) sanctions, having financial effect,
accorded by Government of India other than those pertaining solely to an
individual railway or railway accounts office;
ii) sanctions regarding financial rules and general
orders issued by the Presidentwhich are not of) a general nature but are
applicable exclusively to the Railway Department ;
iii) tenders invited and accepted by the Railway
Board for purchase of materials; and iv) accounts maintained in the office of
the Railway Board (Accounts Branch).
914. The Principal Director of Audit of a Railway is
responsible for detailed audit of the accounts of that Railway and for
conducting inspections of the records of the various offices of that Railway.
This responsibility extends to all expenditure and receipts of that Railway
whether under construction organization or open to traffic and to the account
of stores, stock and manufacture. He audits inter alia
(1) the financial sanctions, pertaining to his
Railway and offices under his audit, accorded by the various Railway
authorities,
(2) allocation of estimates sanctioned by those
authorities,
(3) general orders issued by the General Manager,
(4) all sanctions pertaining to local traffic,
(5) sanctions issued by the Railway Administration
relating to interchange traffic between two railways.
915. The cost of Railway audit is borne by the
Railway revenues and is debited to Major Heads-3001 “Indian Railways-Policy
Formulation Direction Research and other Miscellaneous Organisations,
Annexure-D":-
The cost of the Railway audit wing of the office of
the Comptroller and AuditorGeneral is treated as charged expenditure in
accordance with Article 112 (3) of the Constitution. Payments of all charges
relating to Railway audit offices are made by
the Railway Accounts Officers (of the respective Railways) who function
as treasury officers and accounting officers for expenditure of the Railway
Audit Department and exercise such checks as are prescribed from time to time
by the Ministry of Railways in consultation with the Deputy Comptroller and
Auditor-General of India (Railways).
916.
Communications from Audit -
Ordinarily, the results of statutory audit are communicated through
1)
Specific reports of the more important and serious irregularities discovered in
the course of audit of accounts and departmental offices and station records.
2)
Audit notes detailing minor irregularities discovered in the course of audit of
accounts office records. 3) Inspection reports showing the results of audit of
the initial records of executive offices and stations. Note -A record of petty
objections not formally raised is also maintained by Principal Director of
Audit and sent periodically, as may be arranged, to the Financial Adviser and
Chief Accounts Officer for scrutiny and review.
917.
Disposal of Audit Objections
-All audit objections and notes should be promptly attended to by the Accounts
Officer. Audit objections may either relate to matters which can be disposed of
by the Accounts Officer himself without reference to the executive or to
matters which can be elucidated only by the executive. In the former case, no
reference should ordinarily be made by the Accounts Officer to the executive
except to advise disallowances, if any, arising out of the audit objections.
For the latter, the Accounts Officer should arrange to elicit necessary
information for disposal of the audit objection; and if in his opinion, the
audit objection should be upheld, he should arrange to see that suitable action
is taken. The Accounts Officer should generally take the same action on defects
and irregularities brought to notice bythe Principal Director of Audit as he
would take if they had been discovered in the course of internal check
exercised in his own organisation.
918.
Audit Notes and Inspections Reports
-An inspection report consists of two parts, Part I dealing with the more
important matters and Part II dealing with the rest, containing minor routine
matters. Audit notes detailing the results of monthly test-audit similarly
consists of two parts and should be dealt with by the departments and accounts
officers without delay. The final disposal of Part II of the audit notes and
inspection reports, whether on the
accounts or executive offices, rests with the Accounts Officer, and no
formal reply to the Principal Director of Audit is necessary. The disposal of
such audit notes and inspection reports should, however, be made available to
the Principal Director of Audit. Replies to Part I of inspection reports and
audit notes and specific reports on the more important irregularities should be
sent to the Principal Director of Audit as soon as possible showing clearly the
action taken thereon. A record of the specific reports, audit notes Parts I and
II and inspection reports, Parts I and II received from audit and dealt with or
outstanding should be kept and reviewed periodically to ensure their prompt
disposal. The connected records on which objections have been raised should not
be destroyed till the objections are settled.
919.
Replies to Inspection Reports - Replies to inspection reports of executive
offices should be send by those offices to the Accounts Officer. In
scrutinizing them, the Accounts Officer should call for further information, if
necessary, and consult the head of the division or department, where desirable,
before giving a reply to the Principal Director of Audit. The Accounts Officer
should, in giving replies to the communications to the Principal Director of
Audit, act in close collaboration with the administrative authorities
concerned, so that the information given to audit may be an authoritative
statement of facts on behalf of the Railway Administration, and there may be no
possibility of any dispute at a later stage.
920.
Disagreement between the Accounts Officer and
the Principal Director of Audit -If the Accounts Officer is
unable to accept the views of the Principal Director of Audit, he should, if
requested by the latter, make a reference to the General Manager. When making
such a reference, the Accounts Officer should send a verbatim copy of the
Principal Director of Audit's objection and a statement of his own views. The
General Manager should be requested to obtain the orders of the Railway Board
if the matter is beyond his Competence to decide. However, when the question is
one of accounts procedure, the matter should be referred to the Railway Board.
921.
Audit Objections and Provisional Payments
-If the Principal Director of Audit objects to any payments of a recurring
nature and it is considered necessary to continue them pending settlement of
the objection, they may, if the objection is not on ground of violation of a
law or a statutory rule, be made provisionally and subject to recovery, the
payee being so informed.Unless there are strong reasons to the contrary in the view of the Financial
Adviser and Chief Accounts Officer and the General Manager, if the audit view
appears to be prima facie acceptable to the Accounts Officer, he should act
upon the audit objection provisionally pending receipt of formal orders from
higher authorities, if necessary. Under this procedure, where it is considered
necessary to continue the payments, these should be treated as provisional and
action taken to get the objection answered satisfactorily as early as possible.
922.
Rectification of mistakes in Accounts disclosed by Audit -If the audit scrutiny
discloses any inaccuracy in the accounts compiled by the Accounts Officer the
following procedure, which is equally applicable to mistakes detected
in-internal check, should be adopted:-
1)
If the accounts of the year have not been finally closed, the mistake should be
rectified through the accounts of the month in hand.
2)
Mistakes and misclassifications noticed after the March accounts have been
closed should be rectified before the Capital & Revenue Accounts and
Finance Accounts areprepared and intimated to the Railway Board by the first
week of August either through a revised account or through corrections to
accounts already submitted.
3)
Mistakes and misclassifications noticed after the submission of the Capital
& Revenue and Finance Accounts should be dealt with in accordance with the
following rules :-
a)
No correction need be made, if the item properly belongs to one revenue or
service head but is wrongly classified under another, a suitable note against
the original entry being sufficient. If, however, the error affects the revenue
or expenditure of another railway, or a branch line company or another
Government Department or a capital head outside the Revenue Account or a debt
or remittance head, it must be corrected.
b)
If the corrections, or transfers affect capital major heads, unless they affect
the accounts of different Governments or represent readjustment of less
important misclassifications of a previous year, they should usually be
effected by altering the progressive figure of capital outlay without financial
adjustment i.e. , without passing the debit and credit entries through the
accounts of the year’s financial transactions. This would prevent unnecessary
inflation of the current year's accounts and the voting of grants which the
inclusion of the correcting entries in the current accounts would otherwise involve.
c)
If the error affects a debt or remittance head, the procedure should be as
follows:
i)
Item taken to one debt or remittance head instead of another :- The correction
should be made by transferring it from the one to the other. Such corrections
affecting the heads for which grants are obtained should be made as plus credit
or minus credit under the heads concerned, instead of as minus debit or plus
debit.
ii)
Item credited to a debt or remittance head instead of a revenue head, or
debited to a debt or remittance head instead of to a service head. The
correction should be made by transferring it to the head under which it should
originally appear.
iii)
Item credited or debited to a revenue head instead of to a debt or remittance
head-The correction should be made by minus crediting or minus debiting the
revenue head and crediting or debiting the proper head.
4)
If the rectification of a mistake would lead to an excess over a grant or
grants voted by the Parliament or an appropriation sanctioned by the President
or to a considerable change in the dividend payable during the year to general
revenues, the orders of the Member Finance, Railway Board must be first
obtained.
923.
Audit Report-Railways -The Deputy Comptroller and Auditor- General of India
(Railways) is responsible for preparation of the Report of the Comptroller and
Auditor-General of India, Union Government (Railways) which also includes
comments on the Appropriation Accounts of Railways compiled by Ministry of
Railways (Railway Board).
924.
All important cases coming to notice of Audit during inspections or regular
audit which, in the opinion of the Principal Director of Audit, merit inclusion
in the Report of the Comptroller and Auditor-General are, ordinarily, brought
to the notice of the Railway Administrations through special letters, notes of
objection or factual statements issued to the Heads of Departments/Financial
Adviser and Chief Accounts Officers by the Principal Director of Audit of the
Railways. The Railway Administrations should take up with promptitude the
scrutiny of the facts brought out therein and send their replies to the
Principal Director of Audit within the time prescribed for the purpose. Since
these special letters, factual statements, etc., form the basis of the material
for the Report of the Comptroller and Auditor General, the Railway Administrations should deal with them
at a sufficiently high level and bring out their point of view in a convincing
manner so that the Principal Director of Audit may have the full presentation
of the Railway's case before they proceed to prepare a draft paragraph for
incorporation in the Audit Report.
925.
The Principal Director of Audit sends the draft paragraphs to the General
Manager. He also sends simultaneously advance copies of the draft paragraphs
with connected correspondence, to the Financial Adviser and Chief Accounts
Officer, the Head of the Department concerned, the Deputy Comptroller and
Auditor-General of India (Railways) and the Director (Accounts), Railway Board
to facilitate prompt action and detailed examination of the points brought out
in the draft paragraph. The General Manager should send the reply to the draft
paragraph to the Principal Director of Audit, duly approved by the Ministry of
Railways (Railway Board), if the draft para involves more than one
Railway/Unit, within eight weeks, simultaneously endorsing copies to the Deputy
Comptroller and Auditor-General of India (Railways), and Director, Accounts
(Railway Board). To enable the Railway Board to approve the draft reply
prepared by the Railway Administration, the General Manager should furnish the
following additional information to the Railway Board along with the proposed
reply to draft paragraph :-
i)
A history of the case with copies of relevant correspondence not covered in the
Principal Director of Audit's letter.
ii)
Sentence-wise comments on the draft para specifically verifying /correcting the
facts and figures quoted therein.
iii)
A chronological summary of the case where there has been unusual delay in
dealing with the subject matter.
iv)Remedial
action called for or taken to avoid similar cases in future.
v)
Disciplinary aspects where individual lapses have been brought to light. Any
aspects which the Railway Administration, may wish the Principal Director of
Audit to consider before sending the final reply should, as far as possible, be
settled by personal discussions so that the time limit may not be exceeded. In
cases where the cause of audit objection and the remedial/corrective measures
are within the control of an individual Railway, General Manager of Zonal
Railways/PUs are authorized to send replies to Draft paras after vetting by
Railway’s Finance directly to the Principal Director of Audit. In such cases,
the reply to the draft paras should be sent to Audit within six weeks.
926.
Draft paragraphs on matters arising from the scrutiny of Railway Board's
contracts, schemes and sanctions etc., are issued by the Deputy Comptroller
and Auditor-General of India (Railways)
addressed to the Railway Board. In such cases the material which is required to
be furnished by the Principal Director of Audit of Railways to the Deputy
Comptroller and Auditor-General of India (Railways) should be vetted promptly
by the Financial Adviser and Chief Accounts Officer of Railways, when they are
requested to do so. Enquiries, if any, made by the Deputy Comptroller and Auditor-General
of India (Railways) for further information should be given high priority and,
as far as possible, such information should be supplied promptly to the
Principal Director of Audit by the Railway Administrations duly vetted by the
Financial Adviser and Chief Accounts Officer for onward transmission to the
Deputy Comptroller and Auditor-General of India (Railways). The Deputy
Comptroller and Auditor-General of India (Railways) will send the edited
paragraphs to the Railway Board for verification of facts and clarification on
any point which the Railway Board may like to give before the paragraph is
finalised by the Deputy Comptroller and Auditor General of India (Railways) for
inclusion in the Report. A time-limit is usually specified within which the
Railway Board are expected to complete the factual verification or offer their
comments on these revised/edited paragraphs. These revised paragraphs should,
on receipt by the Railway Board/Railway Administration, be scrutinized promptly
with utmost care as it is not possible to correct any factual inaccuracies in
the draft paragraphs at a later stage.
927.
The Report of the Comptroller and Auditor General of India is presented to the
Parliament, generally during the Budget session, where it is taken up for
consideration by the Public Accounts Committee consisting of members of Lok
Sabha and Rajya Sabha. The Committee obtains personal evidence of senior
officers of the Railway Board in respect of the various items in the
comptroller and Auditor General’s Report. The results of the deliberations
ofthe Public Accounts Committee are published in the form of Reports which are
laid on the table of each House of Parliament and forwarded to the Ministry of
Railways (Railway Board). These Reports contain the recommendations of the
Public Accounts Committee for implementation by the Ministry of Railways.
928.
The recommendations made by the Public Accounts Committee are considered by the
Ministry of Railways (Railway Board), and other Ministries of Government of
India, where, some of the observations and recommendations concern them also,
and notes on action taken on the Public Accounts Committee's recommendations
are submitted to the Committee, along with any comments which Audit department
may have to make on these notes, within six months of the date of presentation
of the Reports.
929.
Internal Audit- Focus -Traditionally, the focus of internal audit has been on
compliance of rules, regulations, policies and procedures. As is evident from
the role assigned to the Internal Audit Wings in the “Redefined Charter for
Financial Advisors” issued by Ministry of Finance on June 1, 2006, the remit of
Internal Audit has been enlarged. While Compliance Audit remains important,
internal auditors are now expected to focus on evaluation of controls with
reference to the risks and to provide an assurance to the Management that the
controls are functioning in the intended manner and hence there is a reasonable
assurance that the goals and objectives of Ministry/Department will be
achieved. Through this, Internal Audit contributes to the efforts to strengthen
governance processes in Ministries/Departments.
930.
Internal Audit Process: The internal audit process comprises of five action
phases.
1.
Planning the audit engagement.
2.
Preparing for Audit.
3.
Performing the audit engagement.
4.
Reporting upon the audit engagement; and
5.
Follow up action.
931.
A typical internal audit assignment involves the following steps:
1)
Establish and communicate the scope and objectives for the audit to appropriate
management/authorities.
2)
Develop an understanding of the operational area under review. This includes
objectives, measurements and key transaction types. This involves review of
documents and interaction with the auditee. Flowcharts and narratives may be
created if necessary.
3)
Describe the risks facing the business activities within the scope of the
audit.
4)
Identify control procedures used to ensure each key risk and transaction type
is properly controlled and monitored.
5)
Develop and execute a risk based sampling and testing approach to determine
whether the most important controls are operating as intended.
6)
Report problems identified and review action plans with management to address
the problems.
7)
Follow-up on reported findings at appropriate intervals for which Internal
Audit departments must maintain a follow up database.
932.
Internal audit is a concurrent process and may not involve the detailed audit
process, unless it is a specific theme based audit, undertaken as a special
audit. By analyzing and recommending business improvements in critical areas,
auditors help the organization to meet its objective. In addition to assessing
business processes, Information Technology (IT), Auditors also review information
controls.
Multiple choice questions:
1.Who appoints the Comptroller
and Auditor General of India?
- A) Prime Minister
- B) President
- C) Chief Justice of India
- D) Finance Minister
Answer: B) President
2.Under which article of the
Constitution is the Comptroller and Auditor General of India appointed?
- A) Article 148
- B) Article 149
- C) Article 150
- D) Article 151
Answer: A) Article 148
3.What is one of the primary
functions of the Comptroller and Auditor General of India?
- A) Formulating financial policies
- B) Conducting the audit of all expenditure from the
Consolidated Fund of India
- C) Issuing currency
- D) Setting up financial regulations
Answer: B) Conducting the audit of all expenditure from the
Consolidated Fund of India
4.Which Act defines the duties,
powers, and conditions of service of the Comptroller and Auditor General of
India?
- A) The Comptroller and Auditor General’s (Duties,
Powers and Conditions of Service) Act, 1971
- B) The Government Accounts Act, 1971
- C) The Finance Act, 1971
- D) The Audit Regulation Act, 1971
Answer: A) The Comptroller and Auditor General’s (Duties, Powers
and Conditions of Service) Act, 1971
5.What type of accounts does the
Comptroller and Auditor General of India audit?
- A) Personal bank accounts of government officials
- B) Accounts of trading, manufacturing, and profit and
loss
- C) Private company accounts
- D) Stock market transactions
Answer: B) Accounts of trading, manufacturing, and profit and loss
6.Who is responsible for the
audit of Railway accounts under the Comptroller and Auditor General of India?
- A) Principal Director of Railway Audit
- B) Deputy Comptroller and Auditor-General of India
(Railways)
- C) Chief Auditor of Indian Railways
- D) Director of Railway Accounts
Answer: B) Deputy Comptroller and Auditor-General of India
(Railways)
7.What is one responsibility of
the Deputy Comptroller and Auditor-General of India (Railways)?
- A) Compiling Railway accounts
- B) Scrutinizing financial sanctions accorded by the
Government of India
- C) Issuing tenders for railway supplies
- D) Approving railway construction projects
Answer: B) Scrutinizing financial sanctions accorded by the
Government of India
8.What form must the accounts of
Union and State Governments take, as prescribed by the Comptroller and Auditor
General of India?
- A) Any form chosen by the government
- B) The form approved by the President
- C) The form outlined in the Companies Act
- D) A standard international accounting format
Answer: B) The form approved by the President
9.Under Article 279 of the
Constitution, what is the Comptroller and Auditor General of India required to
ascertain and certify?
- A) Total expenditure of the Union Government
- B) Net proceeds of any tax or duty collected by the
Government of India
- C) The accuracy of state budgets
- D) Revenue collected by local authorities
Answer: B) Net proceeds of any tax or duty collected by the
Government of India
10.How is the cost of Railway
audit handled?
- A) Paid directly by the Railways
- B) Debited to Major Heads related to Railway policy
formulation
- C) Charged to the General Fund
- D) Covered by external grants
Answer: B) Debited to Major Heads related to Railway policy
formulation
11.What should be done when an
audit objection can be disposed of by the Accounts Officer without reference to
the executive?
- A) The Accounts Officer should arrange for further
review by the Principal Director of Audit.
- B) The Accounts Officer should generally advise
disallowances arising from the audit objections.
- C) The Accounts Officer should immediately escalate the
objection to higher authorities.
- D) The Accounts Officer should delay the response until
further information is available.
Answer: B) The Accounts Officer
should generally advise disallowances arising from the audit objections.
12.How are inspection reports
typically divided?
- A) Part I dealing with administrative issues and Part
II with financial matters.
- B) Part I dealing with important matters and Part II
with minor routine matters.
- C) Part I with operational issues and Part II with
compliance issues.
- D) Part I with financial sanctions and Part II with
procedural guidelines.
Answer: B) Part I dealing with
important matters and Part II with minor routine matters.
13.What should be done if the
Accounts Officer disagrees with the views of the Principal Director of Audit?
- A) The Accounts Officer should make a reference to the
Railway Board directly.
- B) The Accounts Officer should escalate the issue to the
General Manager with a statement of views.
- C) The Accounts Officer should ignore the Principal
Director's objection and proceed with the current procedure.
- D) The Accounts Officer should make a reference to the
Financial Adviser without involving the General Manager.
Answer: B) The Accounts Officer
should escalate the issue to the General Manager with a statement of views.
14.What is the procedure if audit
scrutiny discloses inaccuracies in accounts compiled by the Accounts Officer?
- A) Mistakes should be corrected in the accounts of the
next financial year.
- B) Mistakes should be rectified in the month’s accounts
if the year’s accounts have not been closed.
- C) Corrections should be made only after the final
approval from the Railway Board.
- D) Corrections are not allowed once the accounts are
finalized.
Answer: B) Mistakes should be
rectified in the month’s accounts if the year’s accounts have not been closed.
15.What is the responsibility of
the Deputy Comptroller and Auditor-General of India (Railways) in relation to
audit reports?
- A) To prepare audit reports for all government
departments.
- B) To prepare the Report of the Comptroller and
Auditor-General of India, Union Government (Railways).
- C) To issue special letters to the Railway
Administrations only.
- D) To finalize the Railway Board’s contracts and
schemes.
Answer: B) To prepare the Report of
the Comptroller and Auditor-General of India, Union Government (Railways).
16.How should the Railway
Administration respond to draft paragraphs sent by the Principal Director of
Audit?
- A) By providing a simple acknowledgment of receipt.
- B) By sending a detailed reply with additional
information and comments on the draft paragraphs.
- C) By forwarding the draft paragraphs to the Deputy
Comptroller and Auditor-General of India (Railways) without comments.
- D) By contacting the Public Accounts Committee for
further instructions.
Answer: B) By sending a detailed
reply with additional information and comments on the draft paragraphs.
17.What is the focus of internal
audit according to the "Redefined Charter for Financial Advisors"
issued on June 1, 2006?
- A) Compliance with rules and regulations only.
- B) Evaluation of controls and assurance that controls
are functioning as intended.
- C) Conducting financial transactions for the
department.
- D) Managing external audits and regulatory compliance.
Answer: B) Evaluation of controls
and assurance that controls are functioning as intended.
18.Which phase of the internal
audit process involves developing an understanding of the operational area
under review?
- A) Planning the audit engagement.
- B) Preparing for Audit.
- C) Performing the audit engagement.
- D) Reporting upon the audit engagement.
Answer: B) Preparing for Audit.
19.What is a key responsibility of
the Principal Director of Audit concerning inspection reports?
- A) To prepare detailed financial sanctions for the
Railway Board.
- B) To send draft paragraphs to the General Manager and
Financial Adviser.
- C) To review and respond to replies from Railway Administration
on draft paragraphs.
- D) To issue provisional payments based on audit
findings.
Answer: C) To review and respond to
replies from Railway Administration on draft paragraphs.
20.How should internal auditors
address significant control issues identified during an audit?
- A) By developing and executing a risk-based sampling
approach and reporting findings.
- B) By only documenting the issues without further
action.
- C) By performing a detailed audit process for all
transactions.
- D) By conducting interviews with all employees
involved.
Answer: A) By developing and
executing a risk-based sampling approach and reporting findings.
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