The management of PKG Ltd., has decided to go for an independent audit assessment of whether a given subject matter of the management is in compliance with applicable authorities identified as criteria. Further, it has t

In the given case PKG Ltd. should carry out the Compliance audit . Compliance audits may be planned, performed and reported separately to the Board, senior management or Regulators. The compliance audit is completely different from the audit of financial statements and from performance audits. The compliance audits may be conducted separately on a regular basis, as distinct and clearly-defined audits each related to a specific subject matter. As per Comptroller and Auditor General of India (CAG) Auditing Standards, the Compliance audit is the independent assessment of whether a given subject matter is in compliance with applicable authorities identified as criteria. Compliance audits are carried out by assessing whether activities, financial transactions and information comply in all material respects, with the authorities who govern the audited entity. Compliance auditing may be concerned with: Regulatory - adherence of the subject matter to the formal criteria emanating from relevant laws, regulations and agreements applicable to the entity. Propriety - observance of the general principles governing sound financial management and the ethical conduct of public officials. Objectives of Compliance Audit Contracting and Procurement To verify whether procurement was carried out as per extant rules and in accordance with delegated financial powers. To verify whether financial propriety was ensured during the stages of tendering, evaluation and award of contract. In case of Plant efficiency: To verify whether the usage of power, fuel are as per approved norms. To verify whether plant shutdowns are as per approved norms. To verify whether the production is as per the prescribed scale. To verify whether the installed capacity of the plant is designed as per regulatory approvals. To verify whether the operation of plant complies with environmental norms Corporate social responsibility To verify whether corporate social responsibility framework is as per regulatory approvals To verify whether activities of corporate social responsibility are as per corporate policy. To verify whether the corporate policy is in consonance with relevant regulations and DPE guidelines.