CAG India
Key Concepts
| # | Concept | Explanation |
|---|---|---|
| 1 | Constitutional Body | CAG is the Supreme Audit Institution (SAI) of India; appointment & powers flow directly from Art. 148–151. |
| 2 | Appointment & Term | Appointed by President under his hand & seal; 6-yr term or up to 65 yrs age, whichever earlier; removal same as SC judge (Art. 148). |
| 3 | Audit Mandate | Audits all expenditure from Consolidated Fund of India, States & UTs; also audits receipts & accounts of autonomous bodies (DRDO, ISRO, RBI, PSUs). |
| 4 | Three-Tier Audit | 1. Compliance audit (rules & laws), 2. Performance/Value-for-money audit, 3. IT & forensic audit. |
| 5 | Reports | Three main reports—Appropriation, Finance & Compliance; laid before Parliament/State legislature; PAC examines them. |
| 6 | No Executive Control | CAG is outside the control of the executive; cannot be asked to audit on the dictates of the government. |
| 7 | Audit Boards | Introduced in 1960s; multi-disciplinary teams for PSU audits; reduces outside consultancy cost. |
| 8 | International Link | CAG is ex-officio member of UN Board of Auditors (only 3 members world-wide) and INTOSAI. |
15 Practice MCQs
-
Who audits the accounts of the Reserve Bank of India? A. RBI itself through internal audit
B. CAG under the RBI Act
C. A private auditor appointed by RBI Board
D. SEBI
Answer: B. CAG audits RBI under Sec. 17(2) of RBI Act—external statutory audit.
Trick: “CAG audits money-maker” → RBI prints money → CAG audits it.
Tag: Audit mandate -
The CAG of India is appointed by: A. Prime Minister
B. President
C. Finance Minister
D. Parliament
Answer: B. Art. 148(1) – President under his hand & seal.
Trick: “CAP” – CAG → Appointed → President.
Tag: Appointment -
CAG can be removed from office on the same grounds and manner as: A. Attorney-General for India
B. Supreme Court Judge
C. Governor
D. UPSC Chairman
Answer: B. Art. 148(2) – removal only by President on address of Parliament for proved misbehaviour/incapacity.
Tag: Removal -
Which of the following is NOT audited by CAG? A. Contingency Fund of India
B. Public Accounts of States
C. Municipal Corporation of Delhi
D. Reliance Industries Limited
Answer: D. RIL is a private company; CAG audits only govt. money.
Trick: “CAG audits govt purse, not private purse.”
Tag: Audit scope -
The maximum tenure of CAG is: A. 5 years or 60 yrs
B. 6 years or 65 yrs
C. Till age 62 yrs
D. Life tenure
Answer: B. 6 years or 65 years, whichever earlier.
Tag: Tenure -
CAG submits Appropriation Accounts to: A. President
B. Parliament
C. Public Accounts Committee
D. Finance Minister
Answer: B. Reports are laid before Parliament; PAC only examines them.
Tag: Reports -
The first CAG of independent India was: A. V. Narahari Rao
B. A. K. Chanda
C. C. G. Somiah
D. V. K. Shunglu
Answer: A. V. Narahari Rao (1948-54).
Trick: “First VNR – Very Nice Rao.”
Tag: Firsts -
CAG is an ex-officio member of which UN body? A. UNSC
B. UN Board of Auditors
C. ECOSOC
D. IMF Board
Answer: B. UN Board of Auditors (3 members).
Tag: International -
The concept of “Performance Audit” was introduced in India by: A. Morarji Desai
B. CAG’s office in 1960s
C. Planning Commission
D. Administrative Reforms Commission
Answer: B. CAG pioneered it in 1960s to judge economy, efficiency & effectiveness.
Tag: Audit types -
Which committee recommended that CAG should audit PPP projects? A. N. N. Vohra Committee
B. Vinod Rai Committee
C. Ashok Chawla Committee
D. VK Shunglu Committee
Answer: D. Shunglu Panel 2011 – on Commonwealth Games & PPP audit.
Tag: Committees -
CAG’s reports are examined by: A. Estimates Committee
B. Public Accounts Committee
C. Standing Committee on Finance
D. Committee on Public Undertakings
Answer: B. PAC at Centre & State levels.
Tag: PAC -
Which article deals with the duties & powers of CAG? A. Art. 149
B. Art. 148
C. Art. 150
D. Art. 279
Answer: A. Art. 149 – Parliament prescribes duties & powers.
Tag: Articles -
CAG audits the accounts of which of the following PSUs without any threshold? A. ONGC
B. NTPC
C. Both A & B
D. None – threshold is 50% govt equity
Answer: C. Govt holding any % → CAG can audit; no minimum equity bar.
Tag: PSU audit -
The CAG is not eligible for any further appointment: A. Under Government of India or any State
B. In World Bank
C. In UN
D. In private sector
Answer: A. Art. 148(4) – complete bar on govt jobs post-retirement.
Tag: Post-retirement -
Match: 1. Appropriation Accounts – P; 2. Finance Accounts – Q; 3. Compliance Audit – R P. Whether money spent as voted; Q. Complete financial position; R. Whether rules followed
A. 1-P, 2-Q, 3-R
B. 1-R, 2-P, 3-Q
C. 1-Q, 2-R, 3-P
D. 1-R, 2-Q, 3-P
Answer: A. Classic trio – Appropriation = voted grants; Finance = overall accounts; Compliance = rule book.
Tag: Reports matching
Speed Tricks
| Situation | Shortcut | Example |
|---|---|---|
| Remember Articles | 148-CAP (CAG Appointment & Powers), 149-Duties | 148 → CAG, 149 → Duties |
| Removal similarity | CAG ≈ SC Judge | Both need Parliament address & proved misbehaviour |
| Audit order | “CFI-PAC” | Consolidated Fund → CAG audit → PAC examination |
| First CAG | VNR → Very Nice Rao | 1948 |
| UN body | 3-member UN Board of Auditors | CAG is permanent Indian seat |
Quick Revision
| Point | Detail |
|---|---|
| 1 | Art. 148 – Appointment, oath, salary charged on Consolidated Fund. |
| 2 | Art. 149 – Parliament decides CAG’s duties & powers (CAG’s DPC Act 1971). |
| 3 | Art. 150 – Form of accounts (President on CAG’s advice). |
| 4 | Art. 151 – Reports to be laid before Parliament/State legislature. |
| 5 | CAG’s salary = Rs. 3.5 lakh/month (equal to Cabinet Secretary). |
| 6 | CAG audits ~1500 entities every year; 60% effort on PSU audits. |
| 7 | Performance audit reports tagged as “No. 4” series. |
| 8 | Introduced Separate Audit Boards (SAB) for big PSU audits (1968). |
| 9 | International affiliations: INTOSAI, ASOSAI, UN Board of Auditors. |
| 10 | Only constitutional authority whose overseas tours are audited by itself! |
BETA
