1. SAI India Country Report
10th ASOSAI Research Project “Audit to Detect Fraud and Corruption：Evaluation of the Fight against Corruption and Money Laundering”
SAI India
Country Report

2. About the SAI India
SAI India is headed by the Comptroller and Auditor General of India (CAG)
CAG is a Constitutional Authority
Independence secured through Parliamentary enactment; DPC Act
Expenses of his office are charged on the Consolidated Fund
Fixed six year term and removal is possible only through Parliamentary process.

4. About the SAI India Over 146 offices throughout India for Auditing
Union and State Government
Expenditure
Receipt
Public Sector Undertakings
Rural and Urban local bodies
We also compile and prepare State Government Accounts and perform entitlement functions relating to provident fund, pension and pay.

5. Types of Audit Performance Audit Compliance Audit Financial Audit
Environmental Audit
Social Audit
Information Technology Audit

6. Audit Reports
Union Audit Reports are laid before each house of Parliament
Civil, Autonomous Bodies, Scientific Departments, Defence Services, Railways, Direct taxes, Indirect taxes and Commercial
State Audit Reports are laid before respective legislatures
Civil, Revenue, Commercial and Local bodies

7. Professional Standards Governing Auditing and Accounting
Regulation on Audit and Accounts
Auditing Standards
Good practice guides

8. Role of SAI in Anti-Corruption
Mainly a preventive role
Enforcing accountability
Promoting strong financial management
Strengthening internal control
Disclosure of deviations as deterrence

9. Role of Audit in Relation to Cases of Fraud and Corruption
Responsibility for prevention & detection of fraud and error rests primarily with the management of audited entity
Audit, however ,evaluate and report on the adequacy of systems in place with the auditee to prevent, detect, respond and take remedial measure in relation to fraud & corruption.
This is integral part of all kinds of audits.

10. Role of Audit …
Fraud examination is a part of normal auditing procedure.
Audit findings include the cases of presumptive and suspected frauds when the evidence is clear.
Audit team put red flags which needs further investigations by appropriate agencies.
Audit teams do not make legal determinations of whether fraud has actually occurred.

11. Role of Audit …
Audit teams maintain a attitude of professional scepticism (questioning mind and critical assessment of audit evidence) throughout the audit.
Audit teams carry out independent risk assessment and prioritise audit planning.
Based on risk assessment, they design the audit objectives & audit procedures so as to secure reasonable assurance of detecting material irregularities arising from fraud and corruption.

12. Role of Audit …
SAI India has a dedicated training institute as Centre of Excellence in ‘Audit of Fraud, Fraud Detection Techniques and Forensic Audit’
It acts as a repository of information on the subject through developing quality reading material, case studies research papers .

13. Audit Planning
Independent risk assessment of auditee organizations by field offices
Includes information from various sources on suspected cases of corruption
High risk areas given adequate attention
Contracts of service/procurement
Inventory/Asset management
Revenue receipts
Cash management
Sanctions/clearences
Areas involving public-private interface

14. Fraud indicators Control weaknesses Inadequate record keeping
Unusual transactions
Errors

15. Complaint & Whistle blower mechanism
Robust anti corruption complaint mechanism
Complaints possible at every level
Complaints taken as red flags
Covered by RTI Act
Whistle blowing system encouraged
Facts substantiated in audit

16. Forensic audit No dedicated forensic audit units
These are formed on need basis in case of detection/suspicion of fraud/corruption
Auditors trained in relevant areas
One dedicated training institute for frauds and digital forensics
IT frauds also covered

17. Fraud Auditing Standards
AS of INTOSAI suitably adapted
Provide minimum guidance to auditors on steps and procedures
Reporting standards in Auditing Standards- 2nd edition 2002/Chapter-IV-Reporting Standards/No.-9

18. Follow up
Cases of frauds/corruption are forwarded to vigilance or investigative authorities
Information/documentation used by them for their own examination
Also checked that after reporting system & procedures have been modified
Findings utilized to detect similar acts in other entities
Used as case studies for sensitizing auditors and for their training

19. Thank you