Riverdale Municipal Corporation incurred substantial expenditure during the year 2025–26 on various civic services and development projects. During…

The external control of municipal expenditure is exercised by the state governments through the appointment of auditors to examine municipal accounts. However, the municipal corporations of Delhi, Mumbai and a few others have powers to appoint their own auditors for regular external audit. The important objectives of audit are: (i) reporting on the fairness of the content and presentation of financial statements; (ii) reporting upon the strengths and weaknesses of systems of financial control; (iii) reporting on the adherence to legal and/or administrative requirements; (iv) reporting upon whether value is being fully received on money spent; and (v) detection and prevention of error, fraud and misuse of resources. From the facts of the case, it can be concluded that the audit of Riverdale Municipal Corporation should address all the above objectives. The weaknesses in financial controls, non-adherence to prescribed requirements, inadequate value from expenditure and indications of error, fraud or misuse of resources are matters relevant to the objectives of municipal audit.