top of page

Audit And Assurance

  1. Statutory Audit

  • A statutory audit is an official inspection of an organization's financial records by an external entity. It is designed to determine if the subject's financial statements and records are accurate, and it is not voluntary.

  • Statutory audits mainly apply to publicly traded companies, government agencies, and organizations working in the public's interest. In North America, private companies are generally exempt from publicly disclosing their financial statements or having them audited.

  • ​Cost Audit as prescribed under Section 148 of the Companies Act, 2013. Secretarial audit as prescribed under Section 208 of the Companies Act, 2013. Tax Audit as prescribed under Section 44AB of the Income Tax Act, 1961.

2. Tax Audit

  • The purpose of a tax audit is to validate the income tax computation made by the taxpayer in the income tax return and to ensure compliance with the laws of Income Tax. Auditing of books of accounts must be carried out by a certified Chartered Accountant.

  • A tax audit is when the IRS examines your tax return information to ensure all the reported data is correct. There are four kinds of tax audits: field, correspondence, taxpayer compliance measurement program and office audit. Incorrect data or incomplete tax returns can trigger an audit.

  • A taxpayer is required to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs 1 crore in the financial year. However, a taxpayer may be required to get their accounts audited in certain other circumstances.

3. GST Audit

  • Taxpayers, whose annual turnover is more than Rs. 2 crores in a financial year, are required to get audited by CA every year, under Section 35(5) of the CGST Act.

  • If the annual turnover of a registered taxpayer is more than Rs. 5 crore in a financial year, he is required to get his accounts audit every year. Business with an annual turnover of More than Rs 5 crore, filing of GSTR-9C.

  • The audit shall be completed within a period of three months from the date of commencement of the audit. Where the audit cannot be completed within three months, the commissioner can extend the period of audit by a further period not exceeding six months, stating the reasons, to be recorded in writing.

4. Internal and Management Audit

  • In contrast to an internal audit, which is carried out by the internal audit department of a company, a management audit is conducted by outside companies with specific expertise.

  • Types of Internal audits include compliance audits, operational audits, financial audits, and an information technology audits.

  • Although every audit process is unique, the audit process is similar for most engagements and normally consists of four stages: Planning (sometimes called Survey or Preliminary Review), Fieldwork, Audit Report and Follow-up Review.

bottom of page