Audit Services in India
There is various audit some are mandatory some are voluntarily done by an individual or businesses. Audit services in India can be categorized in the below points:
Statutory Audits: Under this comes various audits as required by statutory that can be under the income tax, under company laws, under banking laws, under GST laws, so this category has a huge scope under audit services in India.
Internal Audits: This is mandatory for certain classes however mostly organization makes it a part of the business because of its significance in assessing the organization current affairs and preventing and detecting any error or frauds.
Management Audit: This category of the audit is to assess and recommend the resources, asset, strategies followed by the organization is in the right shape and going in a planned direction.
Similarly, there are other important audits such as stock audit, due diligence audit, forensic audit and so on.
Statutory Audits in India:
In India, statutory audits are conducted for each fiscal year (For the period 1st April to 31st March) and not the calendar year. The most common important two statutory audits are:
- Company Audits : Company Audits 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.
- Income Tax Audit : 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. To understand if you are liable under the tax audit, you can consult Our tax advisors that are Chartered Accountants . A tax audit can be performed only by a Chartered Accountant.
For banks, financial institution, for power companies, the law of banks, power Governs their statutory audit.
- Internal Audit Procedure, Internal Audit Report: All listed companies have to mandatorily conduct an Internal Audit, for unlisted and for private limited companies, internal audit becomes mandatory that depends upon paid-up share capital, borrowing or deposits. In our FAQ below you can see in detail the limits for Internal audit in India.
- Internal Audit Procedure starts where auditor sees and analyses the current process, the system in an organization. The system and procedure like the management process, authorization process, how things flow for a different department. After analysing these things assessment is done where auditor will compare the result that he analysed at the first step with the internal control functions if it is in line with regulatory norms and internal policies of the organization. The internal audit report is prepared after as a final step of Internal Audit Procedure. The internal audit report shows the comparison and also recommendations are made by auditor wherever required.
Every registered person must get its accounts audited if the aggregate turnover during FY exceeds Rs. 2 Cr from sale of goods or services. Calculation of turnover shall be PAN based i.e. all sale of goods/ services shall be taken for computing the limit of Rs. 2 Cr.
GST audit limit is same for all registered taxpayers, i.e. no separate limit is specified for special category states or UTIs
Exception- Provision for GST audit will not be applicable in case Central Government/ State Government/ Legislative Assembly in case they are subject to audit by CAG or any Statutory Auditor appointed for auditing the accounts of Legislative Assembly.
Requirement of GST Audit-
GST Audit is required for the following reasons-
- GST is the self-assessment tax regime so GST audit is required for ensuring that tax payer has correctly assessed hi liability.
- It involves examination and evaluation of records, GST returns and other related documents.
- To obtain reasonable assurance and ensure that financial statements are free from any material misstatements.
Furnishing of Documents under GST Audit-
- Annual Return
- Copy of Audited Annual Accounts
- Copy of reconciliation Statement
- ALL BUSINESS REGISTRATION(OTHER THAN COMPANY)
- COMPANY REGISTRATION & COMPLIANCES.
- INCOME TAX RETURN AND ITR NOTICES AND SCRUTINY CASES.
- ESI, PF, MSME, STARTUP REGISTRATION.
- AUDITING SERVICES.
- DIGITAL SIGNATURE (DSC)
- IEC CODE AND ISO REGISTRATION.
- ROC AND ANNUAL COMPLIANCES
- GST RETURNS AND REGISTRATION, E-WAY BILL AND COMPLIANCES.
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