Audits can be either directed by any law (External or statutory audit) or by the management of organisation (Internal audits).
The various audits applicable in India to different organisations are:
Incase of companies:
- Audits as per companies act: The audit has to done every year, whether company is functioning or not. The auditor must be a chartered accountant.
- Audits as per other laws: Audits may be specified by other laws currently functioning in country. Centeral government may ask for special audits.
- Listed companies have to conduct internal audits. These audits may be done by Chartered Accountants or any qualified professional.
- Other than tax related or commercial audits there might be audits specified by other departments like Enviroment, Food safety etc.
- Banking companies have to undergo audits as per Banking acts and RBI rules.
Incase of other forms of organisations:
- Incase of LLP, audit is compulsory as per LLP Act if the turnover of the LLP exceeds 40 Lakhs in a year.
- The laws governing an organisation may require audit to be performed.
Income Tax act as per section 44ab requires compulsory audit in case turnover of the organisation (all form of business organisation company, firm, individual etc.) exceeds 1 crore. The section also require audit if the turnover is less than 1 crore and the profit is claimed as less than 8% of sales.
Posted 3 years, 6 months ago by CA Pulkit Sharma
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