Statutory Audit Services
Independent audit of companies under the Companies Act 2013 — performed in accordance with ICAI Standards on Auditing (SAs).
What our Statutory Audit service covers
How the engagement works
Documents required
- → Trial balance for the year
- → Audited financials of previous 2 years
- → Bank statements, BRS for all accounts
- → Sales register, purchase register, expense ledgers
- → Fixed asset register with additions/disposals
- → Inventory records and physical verification report
- → GST returns and reconciliation
- → TDS returns and Form 26AS
- → PF, ESI, professional tax returns
- → Board meeting minutes and AGM resolutions
- → Statutory registers under Companies Act 2013
- → Related party transactions register
- → Loan agreements and confirmations
Who must get a statutory audit?
Under Section 139 of the Companies Act 2013, every company — regardless of size or turnover — must appoint an auditor at the first AGM (to hold office until the conclusion of the sixth AGM, subject to ratification). This includes:
- Private Limited Companies (Pvt Ltd)
- Public Limited Companies
- One Person Companies (OPC)
- Section 8 (Non-Profit) Companies
- Foreign companies operating in India
An audit by a Chartered Accountant is not optional for any company, irrespective of whether profit or turnover thresholds are met.
CARO 2020 — what must be reported
The Companies (Auditor's Report) Order 2020 requires the auditor to report on 21 clauses covering:
- Property, plant and equipment — maintenance, physical verification, title deeds
- Inventory — verification, valuation, working capital limits
- Loans, advances and investments — terms, recovery, related-party
- Deposits, statutory dues, defaults to lenders
- Internal audit, fraud reporting, whistleblower system
- Cash losses, going concern uncertainty
IFC over Financial Reporting (Section 143(3)(i))
For companies meeting the small company exemption threshold (turnover up to Rs 50 crore and borrowings up to Rs 25 crore), IFC reporting is not required. For others, the auditor must opine on the design and operating effectiveness of Internal Financial Controls over Financial Reporting. This requires the company to have documented control policies, control owners, periodic testing and remediation logs.
Auditor independence — ICAI safeguards
As an ICAI member firm, we follow strict independence requirements under the ICAI Code of Ethics and the Companies Act:
- Auditor cannot hold any security or interest in the auditee company
- Auditor cannot provide certain non-audit services (Section 144) like accounting, internal audit, design of IT systems, actuarial services
- Mandatory rotation: individual auditor every 5 years, audit firm every 10 years (for listed companies and specified classes)
- Cooling-off period of 5 years before re-appointment
Frequently asked questions
Is statutory audit mandatory for a private limited company even if turnover is nil? +
Yes. Section 139 of the Companies Act 2013 mandates auditor appointment for every company regardless of turnover, profit or business activity. Even a dormant or nil-activity company must have an audit conducted and AOC-4 filed annually.
How is statutory audit different from tax audit? +
Statutory audit is under the Companies Act 2013 (mandatory for all companies), focusing on true and fair view of financial statements. Tax audit is under Section 44AB of the Income Tax Act (mandatory above turnover thresholds — Rs 1 crore for business, Rs 50 lakh for profession, Rs 10 crore if cash transactions below 5%), focused on accuracy of tax computations and Form 3CD disclosures. Both can be conducted by the same CA but result in separate reports.
When should I appoint the statutory auditor? +
The first auditor must be appointed by the Board within 30 days of incorporation. Thereafter, appointment is by shareholders at the first AGM, valid until the sixth AGM. Form ADT-1 must be filed with ROC within 15 days of the appointment. Existing companies appoint or reappoint auditors at every AGM.
What is the audit fee for a private limited company? +
Audit fees vary based on company size, turnover, complexity, branches/subsidiaries, ICAI minimum recommended scale and ICAI ethics on fee disclosure. Generally, for SMEs with turnover up to Rs 5 crore, fees are in the range of professional rates. Please contact the firm for a quote based on your company specifics.
Can I change my auditor mid-year? +
Yes, but only through formal removal under Section 140 of the Companies Act 2013. This requires a special resolution by shareholders at an EGM and prior approval from the Central Government if the removal happens before the term ends. The auditor has a right to be heard at the meeting. Alternatively, an auditor can resign voluntarily by filing Form ADT-3 within 30 days.
What happens if a company does not get its accounts audited? +
Non-compliance attracts severe penalties under Section 147: fine on the company (Rs 25,000 to Rs 5 lakh) and on every officer in default (Rs 10,000 to Rs 1 lakh). Additionally, the financial statements cannot be approved or filed (AOC-4), leading to ROC striking off the company under Section 248 if defaults continue. Directors of struck-off companies are disqualified for 5 years.
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