According to the recent notification issued by the Comptroller and Auditor General of India (CAG), the empanelment of Chartered Accountants with CAG is meant for audit of financial record only and not for Internal Audit under the Companies Act, 2013.
The CAG of India has issued a notification through which C&AG has invited applications from Chartered Accountants for empanelment of auditors for the year 2019-20 under Sections 139 (5) and 139(7) of the Companies Act 2013. Section 139 deals with Appointment of “Financial Auditor” and Section 139(5) / 139(7) deal with the appointment of the auditor for Government Company or any other company owned or controlled, directly or indirectly, by the Government.
Earlier, this empanelment was called for auditors without mentioning sections, inconsequent to which, confusions were there as to whether the same is for the purpose of internal auditor also.
“However with the present notification, it is clear that the empanelment of Chartered Accountants with CAG is meant for the audit of financial record only and not for Internal Audit under section 138 of the Companies Act,” The President of the Institute of Cost Accountants of India ( ICMAI ), CMA Amit Anand Apte said.
according to him, this initiative of CAG should remove difficulty that the Cost Accountants used to face while filing tenders of Internal Audit since many companies used to also ask for CAG empanelment number as one of the conditions in the tendering process.”
“We are thankful to CAG of India for considering our representation wherein the Institute had highlighted the difficulty faced by our members and bringing about this change in the notification,” he added.
“The Institute had represented to C&AG that in order to ensure unbiased implementation of the provisions of section 138 of the Companies Act, 2013 relating to internal audit and to bring parity between the two professions, the ideal way is to have empanelment of both Chartered Accountants as well as Cost Accountants by the C&AG for Internal Audit purpose. However since C&AG office does not have any panel for Internal Audit, it was requested to issue a clarification stating that the empanelment of Chartered Accountants with C&AG is for Audit under Section 139 (Financial Audit) of the Companies Act only and not for Internal Audit as required under Section 138,” he said.
