Ch 13 - Audit of PSU Flashcards
What happens when the company shares are listed on a stock exchange, but the majority of the shares are still held by the government? To follow or not follow the directions of CAG in this situation? what is the definition of government company under the act?
As defined under section 2(45) of the Companies Act, 2013, a “Government Company” is a company in which not less than 51% of the paid-up share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company.
There is a special arrangement for the audit of companies where the equity participation by Government is 51 percent or more. The auditors of these companies are firms of Chartered Accountants, appointed by the Comptroller & Auditor General, who gives the auditor directions on the manner in which the audit should be conducted by them. He is also empowered to comment upon the audit reports of the auditors. In addition, he has a right to conduct a supplementary audit of such companies and cause test audit if considered necessary, by an order.
