Compliance audit
Also called: Regularity audit · Topic: Constitutional Bodies: UPSC, CAG, Finance Commission and Others · NCERT: Beyond NCERT
Meaning
A compliance audit is a CAG audit that asks two questions. Did the spending follow the law, the rules and the orders that approved it? Are the accounts correct? It is also called a regularity audit. It checks whether money was spent properly, not whether it was spent wisely. Its power comes from the CAG's duties under Articles 149-151 and the CAG (DPC) Act 1971.
Example
Say a department spends money on a scheme without the required sanction (official approval), or spends more than Parliament granted. A compliance audit would point this out in the CAG's report.
Don't confuse with
- Performance audit: this checks whether a programme actually met its goals with economy, efficiency and effectiveness, not just whether the rules were followed.
- Propriety audit: this asks whether spending was wise, even when it was technically legal.