Internal audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2012 Dear all,

Is Internal audit compulsory for government institute like ISI, IIT, IIM or any other.
'what are the provision regarding this ..
Kindly request you to provide the answer with suitable of section of the relevant act

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2012 Kindly request you to all for reply as earlier as possible.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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01 August 2024 Internal audit requirements for government institutions like ISI, IIT, IIM, or similar entities fall under different regulations compared to private and public companies. These institutions, often established by special statutes, generally follow specific guidelines for internal audits and financial management.

### **Regulations for Government Institutions:**

**1. **Government Accounting Standards:**
- **Applicable Standards:** Government institutions are typically governed by accounting standards and financial regulations issued by the Government of India or respective state governments. For instance, the Comptroller and Auditor General (CAG) of India sets standards for auditing government accounts.

**2. **Internal Audit for Government Institutions:**

**1. **Institutions Established by Special Acts:**
- **Specific Provisions:** Institutions like IITs, IIMs, and ISIs are established by specific Acts of Parliament (e.g., the Indian Institutes of Technology Act, 1961 for IITs, and the Indian Institutes of Management Act, 2017 for IIMs). These Acts generally provide guidelines for financial management but may not explicitly mandate internal audits in the same way as the Companies Act, 2013.
- **Internal Audit Practices:** While specific provisions regarding internal audit may not always be explicitly mentioned in these Acts, these institutions typically follow internal audit practices as part of their financial management policies. The practices are often guided by general principles of financial accountability and transparency.

**2. **General Financial Rules and Procedures:**
- **Government Financial Rules:** The General Financial Rules (GFRs) and various other financial guidelines issued by the Ministry of Finance and other relevant departments set standards for financial management and auditing in government entities. These rules often include provisions for internal audit to ensure proper financial control and accountability.

**3. **Comptroller and Auditor General (CAG) Audits:**
- **CAG Audits:** The CAG conducts audits of government accounts, including those of government institutions. These audits review the financial statements and ensure compliance with statutory requirements. The results of these audits are presented to the Parliament or State Legislatures.

**4. **Institutional Internal Audit Policies:**
- **Institution-Specific Policies:** Individual institutions may have their internal audit policies and procedures based on their governance structures and operational needs. For example, IITs and IIMs may have internal audit functions established as part of their financial management practices to ensure adherence to financial rules and regulations.

### **Summary:**

**Internal audit for government institutions like ISI, IIT, and IIM is not explicitly mandated under the Companies Act, 2013 or similar legislation applicable to private and public companies.** However, these institutions follow internal audit practices and financial management guidelines as part of their governance and compliance requirements.

The specific provisions and practices can vary depending on the institution and its governing Act, but generally, internal audits are conducted to ensure transparency, accountability, and proper financial control in government institutions. For detailed and specific regulations, reviewing the institution’s founding Act and relevant government financial rules would provide precise guidance.

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