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Audit & Assurance Services in India
Helping organizations from various sectors on company audit, internal audit, management audit, and other voluntary audits
Company audit as one of the statutory audit is mandatory for Company registered in India. Accounts shall get audited from a Chartered accountant
For an LLP audit of books of accounts is mandatory if its Capital exceeds Rs 25 lacs or if itâ€™s Turnover exceeds Rs 40 Lacs.
Internal audit is mandatory for certain companies if their turnover or borrowing exceeds the specified limit
Frequently Asked Questions
Section 44AB of the income tax act has the provisions related to the audit of accounts. Income tax audit under this section is mandatory for certain class of taxpayers that depends on turnover and receipts limit.
It is mandatory if:
Total sales or gross receipts in business exceeds 100 lakh in any previous year or
For professional gross receipts exceeds 50 lakh in any previous year; or
The assessee is covered under section 44AE, (44BB or 44BBB) and claims that the profits from the business are lower than the profits computed on a presumptive basis.
The assessee is carrying on a notified profession under section 44AA, and claims that the profits from such profession are lower than the profits computed on a presumptive basis under section 44ADA and his income exceeds the basic exemption limit.
Where Income exceeds the basic exemption limit for any assessed who is covered u/s 44AD (4)
44AB is not applicable to a person who declares profits and gains on a presumptive basis u/s 44AD and his total sales, turnover or gross receipts does not exceed Rs. 2 crore.
Also, 44AB is not applicable to a person who derives income of nature referred to in sections 44B and 44BBA.
Company audit is mandatory for all companies registered in India. Company Audit is governed by the Companies Act, 2013. Company audit has the objective of reporting the state of the company’s accounts & finance to the regulatory authority. Audit and assurance services like company audits are performed by qualified auditors who are working as an independent external party.
The audit report form has its own set of rule that is set by the Government. Rules on the appointment, change, removal of auditors has specific rules.
- Audit and assurance services help in Advisory on business restructuring which auditor can figure out in the audit process
- Audit and assurance services help Figure out a plan of action as per auditor’s recommendation
- Audit and assurance services saving of taxes by sorting out the activities which are not adding up any values Saving cost of future compliance missing or incorrect compliance
- Audit and assurance serviceshelp in Prevention and detection of fraud
- Audits are the best form of internal control and fairness for any stakeholder
Applicability of Internal Audit:
Below companies are required to appoint Internal Auditor
- All Listed Public Companies
- Unlisted Public Companies, if it satisfies the following conditions:
- Paid up share capital of Rs. 50 Crore or more during the preceding financial year OR
- Turnover of Rs.200 Crore or more during preceding financial year OR
- Outstanding loans or borrowings from bank/ financial institutions(public) exceeding Rs.100 Crore or more at any point of time during the preceding financial year; OR
- Outstanding deposits of Rs 25 crore or more at any point of time during the preceding financial year
Private Companies: if it satisfies the following conditions:
Turnover of Rs.200 Crore or more during the preceding financial year.
Outstanding loans or borrowings from banks or public financial institutions exceeding Rs.100 Crore or more at any point of time during the preceding financial year.
Compliance audit objective is to ensure that all compliances are being followed by the company or business applications to it. Compliance audit procedures ensure that the company will not have to bear the additional cost in the future for any compliances being incorrectly followed or any compliances being not followed.
Compliance in terms of labor laws, compliance in terms of companies Act, compliance in GST or compliance in income tax, it is very wide when we talk about compliance audit procedures.
The objective of the management audit is to assess the systems, methods, and policies implemented by an organization.
A management audit is not mandated by law however medium to big businesses use management audit as a tool to assess and improve their overall functions.