law: State Financial Corporations Act, 1951 
  37. Audit 
  (1) The affairs of the Financial Corporation shall be audited by
  
  auditors duly qualified to act as auditors of companies under sub-section (1)
  
  of section 226 of the Companies Act, 1956 (1 of 1956), who shall be appointed
  
  by the State Government in consultation with the Comptroller and Auditor
  
  General of India and the Financial Corporation shall pay to the auditors so
  
  appointed such remuneration as the State Government may fix.
  (2) Every auditor shall be supplied with a copy of the annual
  
  balance sheet of the Financial Corporation, and it shall be his duty to examine
  
  it, together with the accounts and vouchers relating thereto, and every Auditor
  
  shall have a list delivered to him of all books kept by the Financial
  
  Corporation and shall at all reasonable times have access to the books,
  
  accounts and other documents of the Financial Corporation and may in relation
  
  to such accounts examine any Director or officer of the Financial Corporation.
  (3) The auditor shall make a report to the shareholders upon the
  
  annual balance sheet and accounts, and in every such report they shall state
  
  whether in their opinion the balance sheet is a full and fair balance sheet
  
  containing all necessary particulars and properly drawn up so as to exhibit a
  
  true and correct view of the State of affairs of the Financial Corporation, and
  
  in case they had called for any explanation or information from the Board,
  
  whether it has been given and whether it is satisfactory.
  (4) The State Government may, in consultation with the
  
  Comptroller and Auditor General of India, at any time issue directions to the
  
  auditor requiring them to report to it upon the adequacy of measures taken by
  
  the Financial Corporation for the protection of its shareholders and creditors
  
  or upon the sufficiency of their procedure in auditing the affairs of the
  
  Financial Corporation and may enlarge or extend the scope of the audit or
  
  direct that a different procedure in audit be adopted, or direct that any other
  
  examination be made by the auditors, if in its opinion public interest so
  
  requires.
  (5) The Financial Corporation shall send a copy of every report
  
  of the auditors to the Comptroller and Auditor General of India at least one
  
  month before it is placed before the shareholders.
  (6) Notwithstanding anything contained in the preceding
  
  sub-sections, the Comptroller and Auditor General of India may, either of his
  
  own motion or on a request received in this behalf from a State Government,
  
  undertake such audit and at such times as he may consider necessary:
  PROVIDED  that where the State Government is required to
  
  make any payment on account of the guarantee given by it under section 6 or
  
  section 7 or section 8, as the case may be, such audit shall be undertaken by
  
  the Comptroller and Auditor General of India.
  (7) Every audit report under sub-section (6) shall be forwarded
  
  to the State Government and the government shall cause the same to be laid
  
  before the legislature of the State.