Official Answer Key & Detailed Solution
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Correct Answer: Option (C) — 2 and 3 only
Concept & Option Breakdown
Standard Reference VerifiedStatement 1 is incorrect: CAG does not exercise exchequer control in India (unlike the British CAG); money is issued by the executive without prior CAG authorization. Statement 2 is correct: Audit reports of the CAG relating to the accounts of the Union are examined by the Public Accounts Committee (PAC), where the CAG acts as a 'friend, philosopher, and guide'. Statement 3 is correct: Findings and evidence documented in CAG audit reports can be and are frequently used by investigating agencies (such as CBI or ED) to frame charges in cases of financial irregularities. Statement 4 is incorrect: The CAG is solely an auditing and reporting authority and does not possess judicial powers to prosecute individuals or companies.
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