STATUTORY AUDIT

At Aakash Seth & Associates Chartered Accountants, we recognize the importance of statutory audits in ensuring compliance and transparency in a company’s financial accounts. Our team of seasoned Indian Chartered Accountants is well-equipped to handle statutory audits as required by the Companies Act, 2013.

Statutory audits are mandatory for all companies registered in India under the Companies Act, 1956 and Companies Act, 2013, as well as Limited Liability Partnerships (LLPs) with a turnover exceeding Rs. 40 Lakhs or a contribution of Rs. 25 Lakhs. As per Section 139(1) of the Companies Act, 2013 read with Rule 3 of Companies (Audit & Auditors) Rules, 2014, every company must appoint an individual or firm as an auditor.

Our team of expert professionals, including CAs, CS, and Lawyers, is highly skilled in Conducting Audits under any applicable statute while adhering to global accounting standards to ensure the usability of audited accounts for various stakeholders such as financial institutions, shareholders, directors, investors, government, banks, and the general public.

With offices in Delhi and Bulandshahr, we cater to diverse industries, including IT, manufacturing, services, and more, providing expert audit services to clients globally.

Our statutory audit team comprises highly skilled professionals who undergo continuous training and development to stay abreast of the latest auditing techniques and regulatory requirements. This ensures that our clients’ annual accounts are accurate and reliable.

The complexity of statutory audits has significantly increased in recent years due to globalization, changing business landscapes, and evolving accounting standards. To address these challenges, Aakash Seth & Associates Chartered Accountants leverages its extensive knowledge, expertise, and core competencies to deliver exceptional results, prioritizing customer satisfaction and excellence.

At Aakash Seth & Associates, we follow a thorough process while conducting statutory audits, which includes:

Obtaining the appointment letter and board resolution copy
Obtaining a no-objection certificate (NOC) from the previous auditor
Filing a no-disqualification status to the company
Filing Form ADT-1 to ROC
Sending a letter of engagement to the company
Assessing the internal control of the company
Formulating an internal audit program action plan and calendar
Conducting the audit as per IGAAP, Companies Act, ICAI Accounting Standards, and Auditing Standards
Forming an opinion on the financial statement prepared by the company
Reporting to shareholders
Attending AGM

As per the statutory audit requirement, all companies, including Private Limited Company, One Person Company, Limited Company, Section 8 Company, Nidhi Company, and Producer Company, must appoint a Statutory Auditor, regardless of the nature of business and sales turnover. In addition, all companies and Limited Liability Partnerships (LLPs) with an annual sales turnover exceeding Rs. 40 lakhs or capital contribution exceeding Rs. 25 lakhs, regardless of the nature of business, must have their accounts audited.

When performing a Statutory Audit, our team concentrates on several key areas:

Internal Control Evaluation: We assess the effectiveness of the client’s internal controls to prevent fraud and errors, conducting thorough testing to determine control strength.
Balance Sheet Verification: Our auditors verify the accuracy of Balance Sheet information by examining supporting documents for secured loans, fixed assets, and other items.
Profit & Loss Account Analysis: We analyze Profit & Loss A/C items through year-over-year comparisons, industry benchmarking, trend analysis, and verification of individual sales and purchase transactions.
TDS Compliance Testing: Our team evaluates TDS compliance by checking voucher entries, verifying source documents, and reconciling books with challans and returns.
GST Compliance Testing: Our team evaluates GST compliance by checking voucher entries, verifying source documents, and reconciling books with challans and returns.
Risk Assessment: We identify and assess potential risks that could impact the client’s financial statements, such as fraud, errors, or non-compliance.
Substantive Procedures: Our team performs substantive procedures, such as testing transactions, balances, and disclosures, to ensure the accuracy and completeness of financial information.
Reporting and Documentation: We prepare comprehensive audit reports and documentation, highlighting findings, recommendations, and areas for improvement.
Communication and Follow-up: Our team maintains open communication with clients throughout the audit process, addressing concerns, and providing guidance on implementing recommendations.
Additional Checks: We also verify:
- Dividend payments
- Compliance with labour laws (PF, ESIC, Gratuity, Bonus, Leave encashment)
- Loans and advances for compliance with the Companies Act, 2013, and Income Tax Act, 1961
- Compliance with other statutory laws and regulations
- Accuracy of financial statements and reporting

We ensure our clients’ financial statements comply with all applicable laws and regulations through a rigorous statutory audit process. This involves a thorough examination of financial statements, internal controls, and relevant documents to verify the accurate and complete representation of the company’s financial position.

Our statutory audit services cater to various entities, including private and public companies, Limited Liability Partnerships (LLPs) as well as other corporate bodies. Our team of professionals conducts statutory audits as per the Companies Act, 2013, and the rules and regulations set by the Institute of Chartered Accountants of India (ICAI).

We are committed to delivering high-quality services, ensuring timely and efficient completion of statutory audit requirements. Additionally, we provide guidance and recommendations to enhance financial reporting and internal controls, which can help companies strengthen their operations and financial management.

Frequently asked questions about statutory audits:

Can a CA, being a relative of a company’s director or Key Managerial Personnel, be its statutory auditor?
No, as per section 141(3)(f), a person whose relative is a director or is in the employment of a company as a director or Key Managerial Person shall not be eligible for appointment as an auditor of that company.
Who can conduct a statutory audit?
Only a Chartered Accountant, or a firm or a Limited Liability Partnership firm (LLP) having a majority of partners, practising in India, qualified for appointment as an auditor of the company can be appointed as an auditor of the company.
What is the penalty for non-compliance with a statutory audit?
For non-compliance with the statutory audit provisions, the fine may range from Rs. 25,000 to Rs. 5,00,000 for the company. For every officer in default, the fine may range from Rs. 10,000 to Rs. 1,00,000.
What is the applicability of Statutory Audit?
Private Company/ Public Company: Statutory Audit is mandatory for a company irrespective of its turnover, profits, etc. If the company is incurring loss even then, a statutory audit is required. LLP: Statutory Audit is applicable if the turnover of the LLP in any financial year exceeds Rs. 40 Lakhs or its contribution exceeds Rs. 25 Lakhs.
What is the difference between an internal audit and a statutory audit?
Internal Audit is carried out to provide unbiased and independent reviews of the system and processes of the business organizations. It is done to detect fraud or prevent errors. A statutory Audit is a type of audit mandated by the law or a statute to ensure that the books of accounts are true and fair as presented to the public and regulators.

Statutory audit is done by a practising chartered accountant, whereas internal audit can be done by the company’s employee. The company’s shareholders appoint a statutory auditor in the annual general meeting, while an internal auditor is appointed by the company’s management.