In order to prevent a Satyam like accounting fraud in state-run companies, the Comptroller and Auditior General of India (CAG) has decided to conduct three-phase audit of 80 PSUs including blue chip entities like Indian Oil, ONGC and Steel Authority.
“A three-phased audit system for about 80 companies for the accounting year 2008-09 has been finalised. These include listed government companies, the navratnas, category 1 miniratnas and statutory corporations like Airports Authority of India (AAI) and National Highways Authority of India, ” official spokesperson for the CAG told PTI. The other companies which would be covered by the three-phased audit by the CAG include BPCL, HPCL, ONGC Videsh and Shipping Corporation of India.
The new system, she said, would aim at introducing more transparency in accounting practices and also expedite finalisation of accounts after close of the financial year. In the first phase, the auditor will review the general accounting policy of the PSUs and also the steps taken by the companies on previous audit remarks, she said.
As part of the review process, the CAG will issue directions to statutory auditiors and managements, in case corrections in accounting practices are needed. The second phase will begin at the end of April when draft accounts or schedules are ready and will involve a detailed auditing of books of accounts.