1

Committee Members:

1. Shri M S Subrahmanyam, DG (Commercial Audit), Hyderabad

2. Ms. Alka Rehani Bhardwaj, DG (GA)
3. Sh. Manish Kumar-II, DG (F&C)
4. Sh. Sandip Roy, DG (Central Railway)
5. Shri Saurabh Kumar Mallick, DG (Central Region)
6. Sh. ShailendraVikram Singh, DG (PC)
7. Sh. Bijit Kumar Mukherjee, PD (Local Bodies)
8. Shri Sumant Narain, PD (Northern Railways)
9. Shri Vikram D Murugaraj, PDA (Railway Commercial)
10. Shri V S Venkatanathan, PDA (Defence), Chandigarh,

Convenor: Shri Purushottam Tiwary, DG (Exam)

Chairperson: Shri K.S. Subramanian, ADAI (Staff)

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 Group- I

PC 1: Language Skills (For all branches)

Duration: 3 hours Maximum Marks: 100
Objective:

1. To test the candidates’ ability to read and comprehend given content and to express
ideas clearly, correctly and in a concise manner.
2. To test the ability of the candidate to analyse information before drafting an audit
product.

Detailed Syllabus:
Type of Questions #: ‘Descriptive’

1. Draft paragraph/ Draft Audit Comments- (range 25-30 marks)

Candidates would be expected to frame a Draft Paragraph or Draft Audit Comments
from the given material (may include contents from Compliance Audit, Performance Audit
and/ or Financial Statements of Autonomous Bodies/ PSUs & Accounts of State/ Central
Government).

2. Short Essay- (500 words; range 20- 25 marks)

Candidates would be required to write one essay from four/ five given topics. They will
be expected to keep closely to the subject of the essay to arrange their ideas in orderly fashion
and to write concisely. Credit will be given for effective and exact expression.

3. Precis- (one third length of the given passage; range 20-25 marks)
The candidate is expected to write a summary or a gist of the main points of a
comprehensive passage that is supposed to cover the main essence/ idea of the passage in her/
his own words.

4. Answering questions after reading a passage (range 10-15 marks)

Candidates would be given a passage to read and comprehend and to answer three to
five short questions in clear, concise and correct language.

5. Letter writing/ drafting OM- (range 10-15 marks)

Candidates would be asked to write an official/ Demi official letter or to draft an Office
Memorandum on a given subject.

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 Reading Material
1. MSO Audit Section 7 Chapter 3 Preparation of Audit Report.
2. Style Guide as prescribed by the Department.
3. Precis and Draft by Muthuswamy and Brinda
4. Karyalay Sahayika- a book published by Kendriya Sachivalaya, Hindi Parishad, New
Delhi.
5. Books which may contain question, standard of which is similar to the Indian Banking
Services for Clerical Grade and Probationary Officers

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 Group- I

PC 2: Government Audit (For all branches)

Duration: 2 hours Maximum Marks: 100
Questions would primarily be Case Study based

Objectives:

To assess Candidate’s knowledge about:

 Audit, type of audits and auditing process, new development in audit
 Mandate of C&AG of India and ability to apply rules provision for audit at all stages.
Note:
 While the details of different types of audit will be covered in respective Group II
papers, this paper would assess the candidate’s ability to differentiate between different
audits and their applicability.
 Different rules/ provisions that form criteria for audit should not be asked to test
knowledge of candidates as part of this paper. However, the questions may be asked
about applicability of such rules. In such a case, the rule provision may be provided to
candidates as part of case.

I. Audit & CAG’s mandate: (Weightage – 15 per cent)

 Definition, type of audits

 Vision and Mission of C&AG of India
 Constitution of India (relevant provisions related to C&AG of India)
i. Part I, Article-12
ii. Part V (Procedures in financial matters- Article 112-117, Chapter V- C&AG of
India- Article 148-151)
iii. Part VI (Procedures in financial matters- Article 202-207)
iv. Part IX, IX A (The Panchayats, the Municipalities, along with 11th and 12th
schedules), 73rd and 74th Constitutional Amendment Acts.
v. Part XI (along with 7th schedule)
vi. Part XII- Chapter I and II
 C&AG of India (Duties Power & Conditions of Service) Act 1971, Regulations on
Audit and Accounts 2020.

II. Principles and Standards of Auditing: (Weightage – 25 per cent)

 International Standards- INTOSAI Principles and selected standards and guidance.

i. ISSAI- 1, 10, 100, 200, 300, 400
 Ethics in Audit, including CAG’s Code of Ethics and ISSAI 130
 CAG’s Auditing Standards.

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III. Audit Process: (Weightage – 30 per cent)

 Planning and Designing of Audit:

Understanding the entity, risk analysis (parameters and techniques), audit
programming, desk review, Audit design matrix (identifying criteria and appropriate
audit methodology).
 Execution
Entry/ exit conference, audit requisition/ audit enquiry/ audit observation, Audit
evidence (characteristics, evidence gathering and analysis techniques)
 Reporting
Different types of audit reports of IAAD, Executive summary, characteristics of good
audit report
 Follow up
PAC/Legislative Committees (constitution, interaction with IAAD and different
reports), ATN/ATR

IV. Audit Specialisations: (Weightage – 10 per cent)

 Environment audit, role of audit in relation to fraud & Corruption, Audit of PPP, Audit
of internal controls

V. Statistics and its application for audit: (Weightage – 20 per cent)

 Descriptive statistics
 Graphical and numerical representation of data
 Measures of central tendency (mean, median, mode) and dispersion
 Basic Concepts of Correlation.
 Sampling techniques (Questions should test the ability of candidates to apply statistical
concepts in a typical audit situation)

Reading Material
1. Constitution of India (relevant provisions related to C&AG of India)
2. C&AG of India (Duties Power & Conditions of Service) Act 1971
3. Regulations on Audit and Accounts 2020
4. CAG’s Auditing Standards 2017
5. Audit Quality Management Framework
6. Internal Controls Evaluation Manual of C&AG
7. Public Private Partnerships in Infrastructure Project Public Auditing Guidelines of
C&AG
8. Environment and Climate Change Auditing Guidelines issued by C&AG
9. Standing Order on Role of Audit in Relation to Cases of Fraud and Corruption issued
by C&AG.

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10. Statistics for Economics (Text Book for Class XI) –
https://ncert.nic.in/textbook.php?kest1=0-9
11. ISSAI- 1, 10, 100, 130, 200, 300, 400 (https://www.issai.org/professional-
pronouncements/)
12. Style Guide of IA&AD

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 Group- I
PC 3: Information Technology (Theory and Practical) (all branches)
Duration: 2 hours Maximum Marks: 100

Objectives:

1. To test IT Skills: This area would cover basic skills in word processing, electronic
spreadsheets and presentation skills (in other words the basic MS Office suite).
The thrust would be on assessing database handling skills. What is far more
important and relevant today, is for the auditor to be able to adopt a database driven
approach. The moment an auditor sees or uses data he should be able to visualise
the data in a data structure. Most of the other skills will emanate from this skill of
the auditor. Even today, it is not infrequent to find auditors using word processors
for data. Even spreadsheet has its limitations while handing data. Most offices do
not have a comprehensive database of auditee units with all the relevant attributes
for carrying out a risk based selection of units – during the annual audit planning
exercise. This is because offices have the auditee data scattered in word and excel
files. An auditor with database handling skills would be able to address this issue.
Likewise in Performance Audits (PAs) – guidelines include exhaustive data
collection in spreadsheets. The information collected in spreadsheets from various
offices has to be manually collated. An auditor with a data driven approach would
be able to provide efficient and effective solution for this as well.

2. To test Skills required to audit in a computerised environment: This area

would test skills on Data acquisition and import from the IT systems of the auditee.

3. To test IS Audit Skills: This area would test skills of the auditor in conducting IS
Audit. The auditor ought to have clarity in regard to the distinction between IS
Audit and use of IT for Audit.

A. Information Technology (Theory) 40 Marks

1.1 Fundamentals of Computers & Information Technology 10 Marks

1.1.1 Introduction to Computers and their components- Hardware, CPU, Memory
devices etc
1.1.2 Basic Software tools MS Word, MS Excel and MS PowerPoint, Operating System,
its keyfunctions, ERP Systems.
1.1.3 Basic Computer Network concepts- LAN/ WAN/ Internet, server infrastructure,
endpointdevices
1.1.4 Cloud computing — basic concepts (IAAS, PAAS, SAAS)

1.2 Database Management Systems 10 Marks

1.2.1. Data and database - basic concepts of DBMS and RDBMS, designing a
database,Normalization.

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 1 2 2. Relational database (Integrity constraints- primary, foreign keys, different types of
Relationships)
1 2 3 Concept of action query, Joins, views, data manipulation etc.

1.3. Governance and Management of Information Systems in India 05 Marks

1.3.1. IT Act 2000 (and subsequent amendments)
1.3.2. IT (reasonable security practices and procedures and sensitive personal data and
information rules-2011)
1.3.3 Guidelines for Indian Government Websites (GIGW)
1 3.4. National e-Governance Plan (NeGP) and associated MMPs (Mission Mode
Projects)
1.3.5. Digital India Programme, e-Kranti mission

1.4. Protection of Information Assets 05 Marks

1.4.1. Basic criteria for information protection - Confidentiality, Integrity and
nonrepudiability,Availability of data
1.4.2. Privacy principles, principles of personally identifiable information (PII)
1.4.3. Physical access and environment control
1.4.4. Information system attack methods and current OWASP vulnerabilities

1.5. Information System Auditing Process 05 Marks

1.5.1. CAG's Standing order on auditing in an IT environment (August 2020)
1.5.2. Type of controls (Control objective and measures, General and IS specific controls)
1.5.3. CAATs, continuous auditing techniques

1.6. Information systems acquisition, development and implementation 05 Marks

1.6.1. System Development Life Cycle (SDLC) phases.

Suggested reading material/ references:

1. CAG's Standing order on auditing in IT environment.
2. WGITA-IDI handbook on IT audit for Supreme Audit Institutions.
3 For 1.3 - Acts/Rules can be used for reading material.
4 Introduction to Computers by Peter Norton –Seventh Edition published by Tata-
McGraw-Hill Education Pvt. Ltd., New Delhi.
5 Cyber Security Guidelines for Government Employees (current version) compiled and
circulated by MEITY – NIC.
6 Checklist for Involvement of Audit in the System Development Phases of Information
Technology Systems printed by the IT Audit Wing (iCISA).

B. Information Technology (Practical) 60 Marks

I. WORD 2019 10 Marks
Formatting Text, Paragraphs, Sections, and objects, Creating and Managing
Tables, List, Index, Reference Table, hyperlink, Mail merge, File Compare,
embedding documents, Bookmarks, Comments, Headers, Footers, Track Changes,

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 Configuring documents to print or save.

II. EXCEL 2019 20 Marks

Creating and Managing Worksheets and Workbooks, Importing Text, CSV, MS-
Access datain Excel, Functions (Text, Numeric and Date), Logical functions (IF,
AND, OR NOT), Formulas, Graphs, fill and Flash fill, Sorting, Advance Filters,
Lookup, Data Validation, Conditional Formatting, Data analysis using Pivot tables,
Creating Power Pivot, What if analysis, Recording Macros,Configuring Worksheets
and Workbooks to print or save.

III. Access 2019 20 Marks

Creating and Managing a Database, Tables with fields of different data types,
Formatting, captions, Validation Rule, Validation text, Indexed etc, Creating
Different types of relationships between more than two databases, use of
Primary/Foreign Key to Link Between two relatedDatabases, extracting data from
single and multiple tables, applying And/Or criteria, Input of data directly by
adding records. Designing Queries. Save/edit/delete Queries, Import/Export from
Excel, Text File, Import from Saved exports, Share Point. Create Forms for
Tables/Queries, Creating/Formatting Reports using Report tool.

IV. Power Point 2019 10 Marks

Create Presentation, Modify presentation themes, Add and edit text to slides, Add
new slides inpresentation. Insert clipart images and shapes to slides, Insert/modify
tables and charts, Add sound and video to a slide presentation, Insert and edit
animations and slide transitions, Display a speaker-lead and self-running
presentation, Print/Save Slides.

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 Group- I

PC-4: Financial Rules, Service Rules and Basic Principles of Government

Accounts and CPWA
(Civil Accounts, Civil Audit & Local Audit)

Duration: 2 hours Maximum Marks: 100

Questions would primarily be Case Study based

Objectives:

To test the candidate’s knowledge of Services Rules, understanding of basic principles

of Government Accounts, General Financial Rules and their application in preparation of the
Annual Accounts of States.

Section I. Service rules and regulations Weightage: 15%

Syllabus

Provisions of the following Rules and Regulations:

1. Fundamental Rules & Supplementary Rules (Part I): - Provisions relating to the following:
(a) General Conditions of Service
(b) Pay, Additions to Pay and Pay Fixation
(c) Dismissal, Removal and Suspension
(d) Retirement
(e) Medical Certificate of Fitness on first entry
2. Fundamental Rules & Supplementary Rules (Part II): Travelling Allowance Rules
3. Fundamental Rules & Supplementary Rules (Part III): CCS (Leave) Rules 1972
4. Central Civil Services (Joining Time) Rules
5. Central Civil Services (Classification, Control and Appeal Rules)
6. Central Civil Services (Conduct) Rules
7. General Provident Fund (Central Services) Rules
8. CCS Pension Rules 1972
9. Defined Contribution Pension Scheme (New Pension Scheme)

Section II. General Financial Rules. Weightage: 15 %

Syllabus
1. Central Government Accounts (Receipts and Payment) Rules, 1983.
2. General Financial Rules, 2017 (Chapters 1,2,3,4,5,7,9,10,11 &12)
3. Delegation of Financial Powers Rules 1978

11
Section III. Civil Accounts Weightage: 70 %
Syllabus
1. Government Accounting Rules,1990- Chapter on General outline of the system of
Accounts
2. Account Code for Accountant General
3. List of Major and Minor Heads of Accounts of Receipts and Disbursements of the Central
and State Governments
4. Comptroller and Auditor General’s Manual of Standing Orders(A&E) Volume-I
(Chapters 3,4,5,6,7,10,11,16,17,19 &20)
5. Comptroller and Auditor General’s Manual Standing Orders (A&E) Volume-II (Chapters
1 & 2)
6. Civil Accounts Manual (Revised second edition 2007) issued by Controller General of
Accounts, Ministry of Finance, Department of Expenditure, New Delhi
(Chapter 1-paragraphs No. 1.2,1.4,1.12, Chapter 4-paragraphs No. 4.6,4.7,4.8 and
Appendix ‘B’ Chapter 5-paragraph No. 5.15 and Annexure ‘C’, Chapter 7 except
paragraph No. 7.16, Chapter 8, Chapter 10-paragraphs No.10.3,10.4,10.9 and Annexure
‘A’ Chapter 16-paragraph 16.1 and Chapter 17- paragraphs No. 17.7 and 17.10)
7. Central Public Works Accounts Code with Appendices
8. Comptroller and Auditor General’s Manual of Standing Orders(A&E) Volume-I (Chapter
8-Accounts of Public works & Chapter 9-Accounts of Forests)
9. Book of Forms referred in CPWA Code

Reference Books:

1. Fundamental Rules and Supplementary Rules for Central Services Part I, II&III
2. Central Civil Services (Classification, Control and Appeal Rules)
3. Central Civil Services (Conduct) Rules
4. Fundamental Rules & Supplementary Rules- Part IV: Dearness allowance, Dearness
Relief and House Rent Allowance
5. Central Civil Services (Joining Time) Rules
6. General Provident Fund (Central Services) Rules
7. CCS Pension Rules 1972
8. Defined Contribution Pension Scheme (New Pension Scheme)
9. General Financial Rules 2017
10. Central Government Account (Receipts & Payments) Rules 1983
11. Delegation of Financial Powers Rules (DFPR) 1978
12. Government Accounting Rules 1990 published by Controller General of Accounts
13. Accounting Rules for Treasuries 1992
14. Account Code for Accountants General
15. Account Code Volume III
16. List of Major and Minor Heads of Accounts of Union and States (LMMH)
17. Comptroller & Auditor General Manual of Standing Orders (A&E) Volume I, II & III

12
18. Civil Accounts Manual, issued by Controller General of Accounts, Ministry of Finance,
19. Department of Expenditure, GOI
20. CPWD Works manual 2014
21. Book of Forms referred in CPWA Code

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 Group- II

PC 9: Basic Financial Accounting and Analysis of Financial Statements

(Commercial)
Civil Accounts, Civil Audit & Local Audit Branch, Defence Audit, Finance &
Communication Audit, Railway Audit
Duration: 2 hours Maximum Marks: 100
Questions would primarily be Case Study based/Practical oriented

Objective:

To test the candidate’s understanding of the basic principles and concepts of accounting
and apply the same in preparing and analyzing the financial statements

Detailed Syllabus:
I. Financial Accounting: (70 Marks)

1. Financial Accounting: Nature and Scope, Limitations of Financial Accounting, Basic

concepts and Conventions, Generally Accepted Accounting Principles (GAAP)
2. Accounting Process: From recording of transactions to preparation of Financial Statements,
Books of original entry, Journal, Ledger, Preparation of Bank Reconciliation Statement,
Trial Balance and Rectification of Errors
3. Depreciation, Provisions and Reserves
4. Final Accounts of Sole Proprietorship Concerns, Non-Profit Organizations
5. Accounts of Joint Stock Companies—Accounting for Share Capital and Borrowings,
preparation of Final Accounts
6. Analysis of Financial Statements: Ratio Analysis, Common-Size Statements, Comparative
Statements, Trend Analysis, Funds Flow Analysis/Statements, Cash Flow
Analysis/Statements

II. Accounting Standards: (30 Marks)

(a) Introduction to Accounting Standards issued by the Institute of Chartered Accountants

of India with special reference to the following Standards (as amended from time to
time):

AS-1: Disclosure of Accounting Policies

AS-2: Valuation of Inventories
AS-3: Cash Flow Statements
AS-4: Contingencies and Events occurring after the Balance Sheet Date
AS-5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting
Policies

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 AS-9: Revenue Recognition
AS-10: Property, Plant and Equipment
AS-12: Accounting for Government Grants
AS-15: Employee Benefits
AS-28: Impairment of Assets
AS-29: Provisions, Contingent Liabilities and Contingent Assets

(b) Uniform Format of Accounts for Central Autonomous Bodies

Reading material /Suggested:

Financial Accounting:
1. Introduction to Accounting by T.S. Grewal
2. Principles and Practice of Accountancy by R.L Gupta and V.K. Gupta
3. Financial Accounting by S.N Maheshwari
4. Basic Financial Accounting by Bhushan Kumar Goyal
5. Basic Book-keeping and Accounts by L. Cuthbert Cropper

Accounting Standards:
1. Compendium of Accounting Standards issued by the Institute of Chartered Accountants of
India
2. Uniform Format of Accounts for Central Autonomous Bodies, prescribed by Government
of India

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 Group- II

PC-12: Performance Audit and Compliance Audit

(All branches except Civil Accounts)
Duration: 2 hours Maximum Marks: 100
Questions would primarily be Case Study based

Objective:

The objective of the paper is to assess the extent to which the candidate has gained
knowledge and acquired skills to conceptualise, design, conduct, and report the performance
and compliance audits

Guidelines, Manuals, and other material

● Performance Audit Guidelines of C&AG

● Compliance Audit Guidelines of C&AG
● IDI’s Performance Audit ISSAI Implementation Handbook (latest edition, including
its appendices – V1 presently)
● IDI’s Compliance Audit ISSAI Implementation Handbook latest edition (V1
presently)
● International Standards of Supreme Audit Institutions (ISSAI) 300, 400, 3000 and
ISSAI 4000
● Audit Quality Management Framework Guidelines issued by C&AG
● CAG’s Manual of Standing Orders (Audit)
● Budget documents

Detailed Syllabus (Indicative from the above manuals and guidelines)

Performance Audit (Part I): 40-60 Marks

● Key principles,
● Strategic Planning Process
● Topic Selection
● Pilot Study,
● Audit Objectives, Approaches, Scope, criteria, and methodology and engaging
stakeholders
● Audit risks and assurance
● Audit Design Matrix, Audit Findings Matrix,
● Conducting the Audit, including Evidence gathering and analysis
● Determining Cause and Effect
● Findings, Conclusion and Recommendations
● Reporting and communication style

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 ● Follow-up on audit results
● Audit Outputs, Outcomes, and Impact
● Output- Outcome Framework and Outcome Budget
● Input - Output model and the three Economy, Efficiency, and Effectiveness
● Outputs and outcomes for programs/ schemes and their indicators
● Segregation of functions and monitoring: To check if the different functions–
purchasing, providing, regulating, financing, etc. – have been segregated by the
government or not
● Data analysis techniques and visualisation:
○ Regression analysis
○ Pareto analysis
○ Identification of critical factors and expenditure commensurate to their
criticality
○ Causal analysis
 Alignment of policies and processes: Evaluate if the ecosystem – process, guidelines,
policies, programs – is aligned to the targets or not

Pattern/ Suggested type of Questions: Of the total, 25% -40 % (of 40-60 marks) marks can
test theoretical knowledge through MCQ. The examiner can include topical questions.

The remaining portion can be three- five case studies (PA reports) followed by 10-15
related questions per case study to test the applied knowledge and skills. The PA reports may
be chosen from diverse areas – social sector (health, education), infrastructure (transport,
power), environment and climate change, financial, industry and corporate affairs. A case
study can be on outcome-based audits. We could try to move towards impact evaluation using
data analysis also. The examinee can also be made to suggest the scope of improvement in a
case study.

Compliance Audit (Part II): 40-60 Marks

● The SAI’s organisational requirements for conducting a compliance audit

● Annual Audit Plan for coverage of Compliance Audit
● Planning compliance audits
● Identification of core areas, Citizen centric issues, and impact of non-compliance (So what?)
● Performing Audit Procedures and gathering and evaluating evidence
● Reporting and follow-up compliance audits
● Documentation of Compliance Audits
● Other topics include Audit Risk, Audit approach, Audit procedures, Quality Control,
drafting audit reports, and constructive and feasible recommendations.

Pattern/ Suggested type of Questions: Of the total, 25% -40 % (of 40-60 marks) marks can
test theoretical knowledge through MCQ. Topical questions, especially those highlighted in
the media, can be included.

36
 The remaining portion can be two- four case studies (Draft paragraphs) followed by
8-12 related questions per DP to test the applied knowledge and skills of the examinee. The
DPs can be chosen from diverse areas and include issues like fraud detection and corruption.
The examinee can also be made to suggest improvements in the Draft Paragraphs.

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 Group- II

PC-14: Financial Audit (All branches except Civil Accounts)

Duration: 2 hours Maximum Marks: 100

Questions would primarily be Case Study based

Objective:

To evaluate the concept, understanding, skills, procedures and methodology for

auditing Financial Statements of the Union and state Government, their autonomous bodies
and for certification of externally aided projects

To test the knowledge of Government Budgeting and understanding of different sources

of revenue for Government, allocation and flow of resources/funds between union and/or state
Governments

Detailed Syllabus

I. General understanding of Financial Audit: 40 Marks

a. Accounting process and classification of Accounts
b. Materiality and Audit Objectives
c. Sensitivity and confidence limit
d. Audit risk and assurance and tests of control
e. Analytical review procedures and substantive tests
f. Forming an audit opinion
g. Format of Financial Statements

I. Financial Audit of Union and State Government: 40 Marks

a) Various stages and details in audit of Appropriation and Finance Accounts
b) Orders about treatment of comments on Excess/Savings in the grants
c) Scrutiny of SCTs in Finance Accounts
d) Analysis of statements in Finance Accounts
e) Important recurring issues in the audit of Accounts
f) Government budget – meaning, objectives and components
g) Constitutional provisions related to budgeting and appropriation of funds
h) Process involved in the preparation of Government budget
i) Budget documents presented in Parliament/State Legislature
j) Sources of revenue for Union and State- Union/State/Concurrent List
k) Financial Relation Between Union and States - Constitutional Provisions
l) Different Grant-in-aids given by the Union Government to State Governments (ex-
Statutory, Discretionary etc.) and/or Panchayati Raj Institutions (ex- tied grants etc.)
and related constitutional provisions

40
 m) Distribution of Tax/ Non-tax Revenues
n) Article 280- Finance commission
o) Key recommendations of the latest Finance Commission related to devolution of
funds/distribution of financial resources to states
p) Provisions of FRBM Act and Rules

II. Audit of Financial Statements of Autonomous Bodies: 10 Marks

a. Format of Accounts
b. Relevant provisions of DPC Act
c. Planning, Execution and Reporting of Audit
d. Relevant provisions of General Financial Rules

III. Certification of Externally Aided Projects: 10 Marks

a. Objectives of Externally Aided Projects
b. Format of Accounts
c. Audit procedure and time schedule for certification
d. General terms and conditions of the agreement for the implementation of projects

Suggested reading material/ references:

i. CAG (Duties, Powers and Conditions of Service) Act 1971
ii. General Financial Rules, 2017
iii. Central Government Accounts (Receipt and Payment Rules) 1983.
iv. Delegation of Financial Powers Rules
v. Government Accounting Rules, 1990
vi. Civil Accounts Manual
vii. Financial Attest Audit Manual
viii. Regulations on Audit and Accounts issued by C&AG
ix. Manual for Audit of Autonomous Bodies issued by C&AG
x. Guidelines issued by C&AG on Audit of Externally Aided Projects
xi. Manual of Standing Orders (MSO) Audit
xii. Practice Note for Audit of Union government Finance Accounts & Appropriation
Accounts (Civil) issued by O/o. DGA(F&C)
xiii. List of Major and Minor Heads (LMMH)
xiv. Constitutional provisions related to budgeting and appropriation of funds- (Articles
112- 117, 202-207)
xv. Budget Documents including Budget at a glance, key budget documents such as
Annual Financial Statements, Demand for grants, Finance bill, Appropriation
bill/Act etc.
xvi. Government Budget Principles and Practice - Dr. C.N. Sudarsanana, Foreword by
– Shri T. N. Chaturvedi
xvii. Fiscal Responsibility and Budget Management Act,2003 and Rules amended from
time to time

41
xviii. Constitution provisions related to financial allocation between centre and state
(Article 268-281, 282-291)
xix. Latest Finance Commission Report
xx. Study of topics related to flow of resources from Union and State Governments
i.e., Grants-in-Aid, Compensation of GST, Centrally Sponsored Schemes, Central
Assistance, EAP, from the latest report of Finance Commission. Guidelines/ orders
issued by Union Government on constitution of SNA.
xxi. MSO (A&E), Vol. 1, Ch.4
xxii. Checklist issued by CAG HQs dated 6 April 2022 regarding Budget Review

42
 Group- II

PC 16 Revenue Audit; Audit of Local Bodies; Public Works Audit

(Civil Audit & Local Audit Branch)
Duration: 2 Hours Maximum Marks: 100
Questions would primarily be Case Study based

Objectives:

This being an omnibus Paper of three areas of audit each of which is extensive in itself,
the attempt here will be to assess the examinee’s understanding of the broad aspects of each of
these streams, as well as a few core areas pertaining to each.
To that end, the specific objectives of this Paper will be as under:

1. Revenue Audit (35 marks out of 100):

Testing the understanding of basic concepts of Income Tax and GST,

2. Local Bodies Audit (35 marks out of 100):

Testing the understanding of the general concepts of Local Bodies Audit, and the
legal framework supporting it,

3. Public Works Audit (30 marks out of 100):

Testing the understanding of concepts of Contracts Audit, audit of Stores and
Stock and aspects of Project Management.

1. Revenue Audit Syllabus:

I. Income Tax

(i) Assessment year, Previous year, Person, Assessee, Charge of income-tax, Income,
Gross Total Income, Total income and tax liability, Agricultural Income,
Difference between exemption and deduction, Definition of Manufacture, Capital
Asset, Company, Fair market value, Capital receipts vs Revenue receipts, Capital
expenditure vs Revenue Expenditure, Method of accounting, Residential status of
Individual & Company, Relation between residential status and incidence of tax,
Receipt & Accrual of income, Income deemed to accrue or arise in India;

(ii) Income Computation and Disclosure Standards (ICDS):

ICDS I Accounting Policies
ICDS II Valuation of Inventories
ICDS III Construction contracts
ICDS IV Revenue Recognition
ICDS V Tangible Fixed Assets

45
 ICDS VI Effects of Changes in Foreign Exchange Rates
ICDS VII Government Grants
ICDS VIII Securities
ICDS IX Borrowing Costs
ICDS X Provisions, Contingent Liabilities and Contingent Assets

(iii)Profits and gains of business or profession – Principles and

Computation: Chargeability, General principles governing assessment of business
income, Method of accounting, Scheme of deductions and allowances,
Depreciation;

(iv) Capital gains - Principles and Computation: Meaning of capital asset, Transfer of
capital asset, Computation of capital gain, Full value of consideration, Expenditure
on transfer, Cost of acquisition, Cost of improvement, indexed cost of acquisition
and indexed cost of improvement, Problems on computation of Long Term Capital
Gains (LTCG) Tax

II. GST:

a. Constitutional Aspects, GST Council, Administration of GST,

Assessment and Audit, Dual GST Model, GST (Compensation
to States) Act, 2017 GST Network,

b. Levy and collection of CGST & IGST – Application of

CGST/IGST law, concept of supply including composite and
mixed supplies, inter-State supply, intra-State supply, supplies
in territorial waters, charge of tax, exemption from tax,
composition levy, Distribution of IGST,

c. Place of supply, time and value of supply,

d. Input Tax Credit, Computation of GST Liability, Procedures of

GST – registration, tax invoice, credit and debit notes,
electronic way bill, accounts and records, returns, payment of
tax including reverse charge, refund, job work, Provisions
relating to e-commerce, GST Forms (GST REG-01, GSTR 1,
GSTR 4, GSTR 10, GST PMT 01, GST-RFD-01, GST ITC-01).

 The following books/reference material are prescribed:

(i) Taxmann’s Direct Tax Manual (Vol. I – Acts),

(ii) Finance Act of the Year (may be read as Finance Act of the Previous year),
(iii) Income Tax Act, 1961
(iv) Income Tax Rules, 1962

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 (v) Income Computation and Disclosure Standards issued by the Ministry of
Finance
(vi) Taxmann’s GST Manual with GST Law Guide
(vii) Centax GST Law Times (Latest issues)
(viii) Handbook of GST in India: Concept and Procedures by Rakesh Garg

2. Local Bodies Audit Syllabus:

Provisions of auditing Standards, Guidelines and Manuals, etc. related to Local

Bodies Audit:
(i) 73rd and 74th Amendments to the Constitution and details thereof,
(ii) Latest recommendations of Central Finance Commission so far as these
relate to Local Bodies only,
(iii) Auditing Standards for Panchayati Raj Institutions and Urban Local Bodies
issued by the C&AG of India,
(iv) Manual of Instruction for Audit of PRIs issued by the C&AG of India in
December 2002.

 The books/reference material prescribed will be the same as above.

3. Public Works Audit Syllabus:

 Basics of Contract Management including General Conditions of Contract,

 Audit of Contracts,
 Audit of Stores and Stock,
 Aspects of Project Management (Environment Impact Analysis, Detailed
Project Report, Land acquisition, coordination with other organisations)

 The following books/reference material are prescribed:

Comptroller & Auditor Generals Manual of Standing Orders (Audit),

Section 2, Chapter 4
Section 3, Chapter 7
Regulation on Audit & Accounts, 2007, as relevant
Relevant Chapters of GFR 2017
Project Management: Pradeep Pai (Pearson)

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