Environment audit in India

Abstract

This paper deals with the subject of Environmental Auditing. Protection of the environment has become a fundamental duty of all world citizens now. Each and every individual needs to be sensitised to the disastrous consequences of neglecting the environment. Simultaneously, there has been a change in the orientation of government auditors world- wide. The idea is to move on from being a critic of government policy to an evaluator who acts as an aid to management. The main research objective of the paper was to understand the concept of environment auditing and to see whether there can be any scope within the concept as understood to fit into the established system of government audit in India. There has been an attempt to construct a framework for government audit and conduct a live environment audit of a government owned PSu. The sub- objectives leading to this main objective were to:(i) Understand the concept with reference to international definitions and practice.(ii) Conduct a case study of the system of environment audit in the government domain in the USA by analysing the system in the Environment Protection Agency as well as the General Accounting Office;(iii) Understand the latest trends in audit of government agencies by Supreme Audit Institutions (i.e. auditors for the supreme authorities in countries) and the International Association of Supreme Audit Institutions with regard to the environment;(iv) Prepare a framework whereby these trends can be fitted into the Indian context, bearing in mind environmental concerns as well as the 'performance audit' based approach of the audit department.(v) Attempt a real audit of Kudremukh Iron Ore Company Limited, a central Government PSU, involved in mining in the bio- sensitive Western ghats. The sub- objectives have been fulfilled, leading to the drafting of a sample case study on which the audit department can build expertise on this fascinating and extremely topical subject. The IA and AD has recently set up a Directorate of Environment Auditing and this paper thus comes at an appropriate time. Some of the strengths and drawbacks of the department have been analysed and suggestions given on how to strengthen this Directorate. It is hoped that this thesis will enable an audit analysis, which ensures no doubt the economy, efficiency and effectiveness of environmental protection measures, but also goes beyond that to look at the equity and ethics of such policy measures.