Information

Audit which is prescribed by the statute is the statutory audit. It is conducted to ensure true and fair view of the book of accounts of a business. The Companies Act, 2013 requires the Financial Statements of the Company to be audited in which auditor reports to the members of the company. Statutory audit is done by the statutory auditor who must be chartered accountant holding a valid certificate of practice. The auditor is appointed at the annual general meeting for the period of 5 years. The company can either appoint Individual or firm as its auditor. Every company, irrespective of its nature of business or turnover, must have its annual accounts audited each financial year. For this purpose, the company and its directors have to first appoint an auditor at the outset.Thereafter, at each annual general meeting (AGM), an auditor is appointed by the shareholders of the company who will hold the position from one AGM to the conclusion of the next AGM. CoKaCo will assist you to connect with the reliable Chartered Accountants for your auditing needs such as Statutory Auditors,Peer Review Auditors.

Features of Statutory Audit :-

  1. It enhances the reliability of published financial statements.
  2. It ensures the management that they have performed their statutory duties appropriately.
  3. It gives assurance to management that they have complied with non-statutory requirements, such as corporate governance requirements.
  4. It gives view on the efficiency of internal controls.
  5. It enhances stakeholders confidence.

Applicability of Statutory Audit :-

Individual / HUF / Partnership Firm Statutory Audit not applicable
Limited Liability Partnership Statutory Audit is applicable only if annual turnover exceeds Rs. 40 lakhs or its capital contribution exceeds Rs. 25 Lakhs
Private Limited Company / Public Limited Company Statutory Audit is mandatory irrespective of Turnover, Profit, Sharecapital etc. Company incurring loss are also required to conduct statutory audit

Preliminary Documents required by auditor at the time of audit

  • Audit Engagement Letter
  • Opening Trail Balance
  • Last Year Signed Audited Financial Statement
  • Copy of Computation Of Income Of Last Year
  • Shareholding Pattern
  • List of Directors
  • List of KMP’s
  • Minutes of Meeting
  • Form 26AS
  • Fixed Assets Register
  • Invoice of Addition To Fixed Assets
  • Invoice of Sale Of Fixed Assets
  • TDS Payments Challans
  • PF / PT / ESIC / MLWF (Whichever Applicable) Payment Challans
  • Advance Tax Payments Challans
  • Returns Copy
  • Loan Payment Sch. & Loan Confirmation Letter
  • Cash Balance Confirmation Letter Along With Denomination
  • Bank Balance Confirmation
  • List of Related Party as Per AS 18
  • Ledger of Related Party Transaction
  • Calculation of Foreign Exchange Profit / Loss
  • Section 164 Of Co. Act: Representation from Director for Qualification
  • Status of Pending Income Tax Assessment
  • Draft Financial Statement
  • Management Representation Letter
  • Any Change in MOA / AOA
  • Certificate Under Sec. 40(A)(3) & 269SS & 269T of Income Tax
  • Copy of Annual Return Filled with MCA
  • Calculation of Director Remuneration as per Companies Act
  • Section 204: Secretarial Compliance Certificate
  • Share Application Pending Refund

FAQ :-

If First Auditor is not appointed by Board of Directors of Company or Board of Directors fails to appoint first auditor, then who will appoint first auditor?

As per Section 139(6): If the Board fails to appoint the First Auditor, an Extra Ordinary General meeting will be called by the Board to appoint the first auditor within 90 days from the receipt of the information from the Board of Directors.

What information are required to be mentioned in Form ADT - 3 ?
  • Category of Auditor Individual / Firm:
    • Income Tax PAN of auditor or auditor’s firm
    • Name of the auditor or auditor’s firm
    • Membership Number of auditor or auditor’s firm’s registration number
    • Address of the auditor or auditor’s firm
    • City
    • State
    • Pin code
    • Email id of the auditor or auditor’s firm
  • Reasons for resignation
  • Any other facts relevant to the resignation
What is the need for conducting Audit?

Following are the situations which require to conduct the audit of an organisation :-

  • Increased size and complexity of Business
  • Enhanced compliance requirements
  • Assessment of Risk of material MIS Statement
  • Unconventional business models
  • Intensive use of information technology
  • Stringent norms mandated by regulators to protect investors
How are audits selected?

Audits are generally selected through an annual risk assessment process. Our risk assessment includes factors such as:

  • Size and complexity of operation
  • Change in business environment
  • Time elapsed since last audit

An annual audit work plan is developed, based on this risk assessment and consultation with management and the Audit and Compliance Committee of each board. The work plan defines the areas to be audited.

Information

Audit which is prescribed by the statute is the statutory audit. It is conducted to ensure true and fair view of the book of accounts of a business. The Companies Act, 2013 requires the Financial Statements of the Company to be audited in which auditor reports to the members of the company. Statutory audit is done by the statutory auditor who must be chartered accountant holding a valid certificate of practice. The auditor is appointed at the annual general meeting for the period of 5 years. The company can either appoint Individual or firm as its auditor. Every company, irrespective of its nature of business or turnover, must have its annual accounts audited each financial year. For this purpose, the company and its directors have to first appoint an auditor at the outset.Thereafter, at each annual general meeting (AGM), an auditor is appointed by the shareholders of the company who will hold the position from one AGM to the conclusion of the next AGM. CoKaCo will assist you to connect with the reliable Chartered Accountants for your auditing needs such as Statutory Auditors,Peer Review Auditors.

  1. It enhances the reliability of published financial statements.
  2. It ensures the management that they have performed their statutory duties appropriately.
  3. It gives assurance to management that they have complied with non-statutory requirements, such as corporate governance requirements.
  4. It gives view on the efficiency of internal controls.
  5. It enhances stakeholders confidence.
Individual / HUF / Partnership Firm Statutory Audit not applicable
Limited Liability Partnership Statutory Audit is applicable only if annual turnover exceeds Rs. 40 lakhs or its capital contribution exceeds Rs. 25 Lakhs
Private Limited Company / Public Limited Company Statutory Audit is mandatory irrespective of Turnover, Profit, Sharecapital etc. Company incurring loss are also required to conduct statutory audit
Preliminary Documents required by auditor at the time of audit :-
  • Audit Engagement Letter
  • Opening Trail Balance
  • Last Year Signed Audited Financial Statement
  • Copy of Computation Of Income Of Last Year
  • Shareholding Pattern
  • List of Directors
  • List of KMP’s
  • Minutes of Meeting
  • Form 26AS
  • Fixed Assets Register
  • Invoice of Addition To Fixed Assets
  • Invoice of Sale Of Fixed Assets
  • TDS Payments Challans
  • PF / PT / ESIC / MLWF (Whichever Applicable) Payment Challans
  • Advance Tax Payments Challans
  • Returns Copy
  • Loan Payment Sch. & Loan Confirmation Letter
  • Cash Balance Confirmation Letter Along With Denomination
  • Bank Balance Confirmation
  • List of Related Party as Per AS 18
  • Ledger of Related Party Transaction
  • Calculation of Foreign Exchange Profit / Loss
  • Section 164 Of Co. Act: Representation from Director for Qualification
  • Status of Pending Income Tax Assessment
  • Draft Financial Statement
  • Management Representation Letter
  • Any Change in MOA / AOA
  • Certificate Under Sec. 40(A)(3) & 269SS & 269T of Income Tax
  • Copy of Annual Return Filled with MCA
  • Calculation of Director Remuneration as per Companies Act
  • Section 204: Secretarial Compliance Certificate
  • Share Application Pending Refund
If First Auditor is not appointed by Board of Directors of Company or Board of Directors fails to appoint first auditor, then who will appoint first auditor?

As per Section 139(6): If the Board fails to appoint the First Auditor, an Extra Ordinary General meeting will be called by the Board to appoint the first auditor within 90 days from the receipt of the information from the Board of Directors.

What information are required to be mentioned in Form ADT - 3 ?
  • Category of Auditor Individual / Firm:
    • Income Tax PAN of auditor or auditor’s firm
    • Name of the auditor or auditor’s firm
    • Membership Number of auditor or auditor’s firm’s registration number
    • Address of the auditor or auditor’s firm
    • City
    • State
    • Pin code
    • Email id of the auditor or auditor’s firm
  • Reasons for resignation
  • Any other facts relevant to the resignation
What is the need for conducting Audit?

Following are the situations which require to conduct the audit of an organisation :-

  • Increased size and complexity of Business
  • Enhanced compliance requirements
  • Assessment of Risk of material MIS Statement
  • Unconventional business models
  • Intensive use of information technology
  • Stringent norms mandated by regulators to protect investors
How are audits selected?

Audits are generally selected through an annual risk assessment process. Our risk assessment includes factors such as:

  • Size and complexity of operation
  • Change in business environment
  • Time elapsed since last audit

An annual audit work plan is developed, based on this risk assessment and consultation with management and the Audit and Compliance Committee of each board. The work plan defines the areas to be audited.