Role of C&AG under Section 143(5), (6), and (7) of the Companies Act, 2013
# Role of C&AG under Section 143 of the Companies Act, 2013
## Overview
Section 143 of the Companies Act, 2013 specifically empowers the C&AG in relation to government companies. Three sub-sections are critical for CA Inter exams.
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## 1. Power to Appoint Auditor — Section 143(5)
C&AG appoints the First Auditor or Subsequent Auditor of a government company
C&AG directs such auditor on the manner in which the accounts are required to be audited
Upon appointment, the auditor submits a copy of the audit report to C&AG, which must include:
The directions (if any) issued by C&AG
Any other required information
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## 2. Supplementary Audit and Comments — Section 143(6)
Timeline: Within 60 days from the date of receipt of the audit report, C&AG has the right to:
### Section 143(6)(a) — Supplementary Audit
Conduct a supplementary audit of the financial statements
Authorize person(s) to conduct such audit
Require additional information to be furnished on specified matters, in such form as C&AG may direct
### Section 143(6)(b) — Comment upon or Supplement the Audit Report
Comment upon or supplement the audit report
Distribution of C&AG's Comments:
Any comments/supplement by C&AG shall be sent by the company to every person entitled to copies of audited financial statements under Section 136
> Critical: It is the company that sends C&AG's comments — not C&AG himself.
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## 3. Test Audit — Section 143(7)
C&AG may (if he considers necessary), by order, cause test audit to be conducted
Applies to any company covered under Section 139(5) or 139(7)
Discretionary — only triggered 'if he considers necessary'
Provisions of Section 19A of the C&AG Act, 1971 shall apply to the report of such test audit
Not bound by the 60-day window — can be ordered at any time
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## Key Numbers at a Glance
Provision
Key Detail
Section 143(5)
C&AG appoints auditor; auditor submits copy of report to C&AG
Section 143(6)
60 days from date of receipt of audit report — supplementary audit + comments
Section 143(7)
Test audit — discretionary, no time limit, governed by Section 19A of C&AG Act
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## Flow of C&AG's Comments (Section 143(6)(b))
```
C&AG issues comments/supplement
↓
Company receives it
↓
Company sends to every person entitled to
audited financial statements (under Sec. 136)
```
Worked example
### Example 1
Question: C&AG received the audit report of a government company on 1st April 2024. What rights does C&AG have, and by what date must action be taken under Section 143(6)?
Answer:
C&AG must act within 60 days of receiving the report, i.e., by 30th May 2024.
Within this window, C&AG may:
1. Conduct a supplementary audit under Section 143(6)(a) — authorizing persons to audit and requiring additional information
2. Comment upon or supplement the audit report under Section 143(6)(b)
If C&AG issues comments or a supplement:
The company must send these to every person entitled to receive audited financial statements under Section 136
Additionally, at any time (not bound by 60 days), C&AG may order a test audit under Section 143(7) if he considers it necessary.
### Example 2
MCQ-type Question: Under Section 143(6) of the Companies Act, 2013, within how many days from the date of receipt of the audit report does C&AG have the right to conduct a supplementary audit?
(a) 30 days (b) 45 days (c) 60 days (d) 90 days
Answer: (c) 60 days
The 60-day clock starts from the date of receipt of the audit report by C&AG — not from the date of signing the report, the AGM, or the financial year-end. This precise trigger point is important for exam answers.
⚠️ Common exam mistakes
Confusing the start of the 60-day window — it runs from the date of receipt of the audit report by C&AG, not from the date of signing, the AGM, or the financial year-end.
Thinking test audit under Section 143(7) is mandatory — it is discretionary ('if he considers necessary') and there is no 60-day time limit for ordering it.
Assuming C&AG directly distributes his comments to shareholders — the company is responsible for sending C&AG's comments/supplement to every person entitled to receive audited financial statements under Section 136.
Treating supplementary audit and test audit as the same — supplementary audit (Sec. 143(6)(a)) is within the 60-day window; test audit (Sec. 143(7)) is discretionary with no specific time limit.
Bare-Act text Section 143(6) · Companies Act, 2013 · click to expand
The Comptroller and Auditor-General of India shall within 60 days from the date of receipt of the audit report have a right to— (a) conduct a supplementary audit under section 143(6)(a), of the financial statement of the company by such person or persons as he may authorize in this behalf; and for the purposes of such audit, require information or additional information to be furnished to any person or persons, so authorised, on such matters, by such person or persons, and in such form, as the Comptroller and Auditor-General of India may direct; and (b) comment upon or supplement such audit report under section 143(6)(b). Any comments given by the Comptroller and Auditor-General of India upon, or supplement to, the audit report shall be sent by the company to every person entitled to copies of audited financial statements under sub-section of section 136.