The Government has said statutory auditors for Government Companies are appointed by the Comptroller & Auditor General of India (C&AG) in exercise of the powers conferred under section 619(2) of the Companies Act, 1956 as amended vide Companies (Amendment) Act, 2000. For this purpose, a panel of firms of Chartered Accountants is maintained by the C&AG by inviting applications ‘on line’ every year from the eligible firms of Chartered Accountants. Giving this information in written reply to a question in the Rajya Sabha today Shri Salman Khurshid, Minister of Corporate Affairs, said that the eligibility criteria determined is displayed on the website of the C&AG of India i.e.www.cag.gov.in . The panel so formed is used for selection of statutory auditors of public sector undertakings for the ensuing financial year.
Shri Khurshid further informed the House that selection of the statutory auditors for appointment is made by correlating the point score (calculated on the basis of the criteria for empanelment) earned by each firm of Chartered Accountants that applies for empanelment with the size of the audit assignment. The point score is based upon the experience of the firm, number of partners and their association with the firm, number of Chartered Accountant employees etc. for assessing that the antecedents of the firm are well established and the firm has capacity to handle the allotted audits. This system ensures that allotment of audit to Chartered Accountants’ firms is done objectively based on merit and competence.
-Vishal Somani
CAclubindia
