Statutory Audit Services in Delhi
Independent audit of companies under the Companies Act 2013 — performed in accordance with ICAI Standards on Auditing (SAs).
Quick answers
What is a statutory audit?
A statutory audit is the annual independent audit of a company’s financial statements by a Chartered Accountant appointed under Section 139 of the Companies Act 2013. The auditor reports under Section 143 in formats prescribed by the Standards on Auditing, including CARO 2020 reporting and, where applicable, an opinion on internal financial controls.
Which companies need a statutory audit?
Every company registered in India, whether private limited, public, OPC or Section 8, must have its accounts audited each year, irrespective of turnover or profit. CARO 2020 reporting and internal financial controls reporting apply depending on the company’s category and thresholds, as explained further down this page.
How does SKAG and Associates conduct the audit?
After an engagement letter, the firm plans the audit based on a risk assessment, may carry out an optional interim visit, tests balance sheet and profit and loss items at year-end, and discusses findings with management. The audit report, with CARO 2020 and IFC reporting, is then finalised for the company’s AOC-4 filing.
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
Statutory Audit: rules and practical points
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; annual ratification by members was dropped by the Companies (Amendment) Act, 2017 with effect from 7 May 2018). 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))
IFC reporting is not required for One Person Companies, small companies, and private companies with turnover below Rs 50 crore as per the latest audited financial statements and borrowings below Rs 25 crore at all times during the year, provided the company has not defaulted in filing its financial statements or annual return (MCA notification G.S.R. 583(E) dated 13 June 2017). 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
Statutory Audit for clients in New Delhi & Delhi NCR
SKAG and Associates is a firm of Chartered Accountants based at Kh.No-84, Plot No -RZ-I-1, F/Floor, 12/2, Main Rd, opposite Yammaha Showroom, Mahavir Enclave, New Delhi – 110045. We provide statutory audit and allied compliance support to individuals, professionals, firms and companies across New Delhi, South West Delhi and the wider Delhi NCR region, as well as clients elsewhere in India who engage us remotely.
Engagements are conducted strictly in accordance with the Chartered Accountants Act, 1949 and the ICAI Code of Ethics. To discuss your requirement, you are welcome to contact the office or call +91 88022 54567 during working hours (Mon–Sat, 10:00 AM–7:00 PM).
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 does the scope of a statutory audit depend on? +
The audit effort depends on the size and turnover of the company, the complexity of its transactions, the number of branches or subsidiaries and the reporting required (including CARO 2020 and internal financial controls where applicable). In keeping with the ICAI Code of Ethics, the firm does not advertise fees; the terms are agreed in writing in an engagement letter. For a specific requirement, you may contact the firm.
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.
Questions about Statutory Audit?
You may contact CA Gaurav Singh to discuss your specific facts and requirements.
Contact the Firm →