Explanation:

The term 'Audit' includes financial audit, regularity audit and performance audit”. The CAG has ‘to ascertain whether money shown in the accounts as having been disbursed was legally available for and applicable to the service or the purpose to which they have been applied or charged and whether the expenditure conforms to the authority that governs it. In addition to this legal and regulatory audit, the CAG can also conduct the propriety audit, that is, he can look into the ‘wisdom, faithfulness and economy’ of government expenditure and comment on the wastefulness and extravagance of such expenditure. However, unlike the legal and regulatory audit, which is obligatory on the part of the CAG, the propriety audit is discretionary.