Company Audit

Identify problems. Increase credibility.

Get a complete assessment of the Company.

Benefits

A good company to all.

  • Company audit helps to identify weaknesses in the accounting systems and enables us to suggest improvements.
  • An audit will enhance the credibility & reliability of the figures being submitted to prospective buyers. If an owner manager is planning on selling in the next three years, it may be beneficial to carry out regular audits
  • company audit assures directors not involved in the accounting functions on a day-to-day basis that business is running in accordance with information they are receiving, and helps reduce the scope for fraud and poor accounting.
  • company audit gives assurance to shareholders that the figures in the accounts show a true and fair view
  • Company audit adds credibility to published information for employees, customers, suppliers, investors and tax authorities:

Procedure

In conformation with the statutes.

  • Getting Appointment Letter & Board Resolution Copy
  • Getting NOC from Previous Auditor
  • Filing our no disqualification status to the company
  • Filing of Form 23B to ROC
  • Getting Letter of Engagement
  • Assessment of Internal Control
  • Formulation of Internal Audit Program Action Plan and Calendar
  • Conduction Audit as per IGAAP Companies Act ICAI Accounting Standards and Auditing Standards
  • Forming an opinion on financial statement prepared by the company
  • Reporting to Shareholders
  • Attending AGM

Documents required

May be everything, belonging to the Company.

  • Audit engagement letter
  • Opening trail balance
  • Last year signed financial statement
  • Copy of camputation of income of last year
  • Shareholding pattern
  • List of directors
  • List of kmps
  • Register 301 extracts
  • Minutes of meeting
  • Form 26as
  • Fixed assets register
  • Invoice of addition to fixed assets
  • Invoice of sale of fixed assets
  • Tds payments challans
  • Pf/pt/esic/mlwf(whichever applicable) payment challans
  • Advance tax payments challans
  • Returns copy
  • Loan payment sch. & loan confirmation letter
  • Cash balance confirmation letter along with denomination
  • Bank balance confirmation
  • Outstanding entry passed:provide supporting xerox copy
  • List of related party as per as18
  • Ledger of related party from tally having transaction
  • Calculation of foreign exchange profit/loss
  • Cash ledger with transaction more than rs. 20000/-
  • Section 274(1)(g) of co. Act: representation from director for qualification
  • Status of pending income tax assessement
  • Draft financial statement
  • Management representation letter
  • Any change in moa/aoa
  • Certificate under sec. 40(a)(3) & 269ss & 269t of income tax
  • Copy of annual return filled with mca
  • Calculation of director remuneration as per companies act
  • Section 383a: secretarial compliance certificate
  • Share application pending refund

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FAQs

  • A corporate body other than the LLP registered under the Limited Liability Partnership Act, 2008;
  • An officer or employee of the company;
  • A person who is a partner with an employee of the company or employee of a company employee;
  • Any person who is indebted to a company for a sum exceeding INR 1,000 (US$14) or who have guaranteed to the company on behalf of another person a sum exceeding INR 1,000 (US$14);
  • Any person who has held any securities in the company after one year from the date of commencement of the Companies (Amendment) Act, 2000; or
  • Any person who has been convicted by a court of an offence involving fraud and a period of 10 years has not elapsed from the date of such conviction.

The Company Auditor’s Report Order (CARO), 2016 requires an auditor to report on various aspects of the company, such as fixed assets, inventories, internal audit standards, internal controls, statutory dues, among others.

The auditor must follow the auditing standards as recommended by the Institute of Chartered Accountants of India (ICAI). In case the auditor uncovers any fraud during the audit must report it to the government immediately.

After the audit is completed, the auditor should submit the audit report to the members and shareholders of the company.

For non-compliance with a statutory audit, fines range from INR 25,000 (US$351) to INR 500,000 (US$7,029) for the company.

For every officer in default, imprisonment of up to one year, or fine of INR 10,000 (US$140) to INR 100,000 (US$1,405), or both.

Below is the list of individuals who cannot be an auditor as per the Companies Act:

  • A body corporate
  • A person who is a partner with an employee of the company
  • An officer or employee of the company
  • Any person who is indebted to a company for a sum exceeding Rs 1,000 / who have guaranteed to the company on behalf of another person a sum greater than Rs. 1,000.
  • A person who has held any securities in the company after one year from the date of start of the Companies Act, 2000.
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