Who is required to get an audit?
Statutory audit (Companies Act 2013): Every company — private limited, public limited, or one-person — is required to appoint an auditor under Section 139 of the Companies Act 2013. The statutory audit must be completed before the Annual General Meeting, and before the annual return filing due date with the MCA (within 60 days of the AGM, effectively September 30 in most cases).
Tax audit (Income Tax Act 1961): Under Section 44AB, a tax audit is mandatory if your business turnover exceeds ₹1 crore (₹10 crore if cash receipts and payments are each below 5% of total turnover), or if your gross professional receipts exceed ₹50 lakh. The tax audit report must be filed by September 30, and the ITR by October 31. Missing these dates attracts a penalty under Section 271B of 0.5% of turnover, subject to a minimum of ₹1.5 lakh.
Internal audit (voluntary): No turnover threshold applies. Businesses that want a periodic independent review of their financial controls, expense approvals, inventory management, or vendor payments commission internal audits. Banks and institutional lenders increasingly ask for internal audit reports before extending working capital lines.
What the audit engagement covers
- Statutory audit (Companies Act)
We audit your financial statements in accordance with Standards on Auditing (SA) issued by the ICAI. The audit covers the balance sheet, profit and loss account, cash flow statement, and notes to accounts — and results in a signed auditor's report under Section 143 of the Companies Act. We flag reportable matters, qualify where warranted, and explain every finding in plain language.
- CARO 2020 report
For applicable companies, the Companies (Auditor's Report) Order 2020 requires a detailed report on 21 specific matters including fixed assets, inventories, loans, defaults, fraud, and CSR compliance. We prepare this as a standalone annex to the statutory audit report.
- Tax audit (Form 3CA/3CB and 3CD)
For businesses and professionals crossing the Section 44AB threshold, we conduct the tax audit and prepare Form 3CD — a detailed questionnaire covering 44 clauses including loan transactions, related-party payments, deductions claimed, and TDS compliance. Errors in Form 3CD are the most common trigger for tax notices.
- IND AS / Accounting Standards compliance review
We verify that your financial statements comply with applicable Accounting Standards (AS for non-listed companies; IND AS for companies above ₹250 crore net worth or listed entities). Revenue recognition, depreciation, and lease accounting are the most common departure points.
- Internal audit (control review)
We conduct a risk-based internal audit covering the processes you specify — typically: accounts payable/receivable, payroll, procurement, inventory, and bank reconciliations. The output is a findings report with each issue rated by risk level and a recommended action.
- Management letter
Beyond the audit report required by law, we provide a management letter summarising observations, control gaps, and recommendations. This is the document that makes the audit useful — not just compliant.
How the audit engagement works
Month 1
Planning and risk assessment
We review your prior-year financials, identify high-risk areas, and issue a structured document request — trial balance, bank statements, major contracts, fixed asset register, debtors and creditors ageing.
Month 1–2
Fieldwork
Our team works through the prepared documents, conducts substantive testing on key balances, verifies physical inventory (if applicable), and reconciles bank statements. Queries communicated via your client portal.
Month 2
Draft report and management discussion
We share the draft audit report and management letter for your review. This is the moment to discuss observations, correct any misunderstandings, and confirm the numbers we are signing off on are accurate.
By Sep 30
Signed report filed
Tax audit Form 3CA/3CB/3CD submitted before September 30. Statutory audit sign-off timed to your AGM schedule. You receive signed documents and a compliance calendar for the next 12 months.
What audit services cost
Statutory Audit (Private Limited Company)
from ₹15,000
per year
- Statutory audit under Companies Act
- CARO 2020 report
- Management letter with findings
- MCA filing support
Tax Audit (Section 44AB)
from ₹12,000
per year
- Form 3CA/3CB preparation
- Form 3CD (44 clauses)
- Linked ITR filing support
Audit fees depend on company size (turnover, number of transactions, complexity of balance sheet), number of locations, and whether prior-year workpapers are available. Book a free 30-minute call for a precise quote — most small private limited companies receive a quote the same day.
What clients ask about audit
My company is making a loss. Do I still need a statutory audit?
Yes. Under Section 139 of the Companies Act 2013, every company must appoint an auditor regardless of profitability or turnover. The audit obligation begins from incorporation and continues every year. A loss-making company has the same audit requirements as a profitable one — and often more scrutiny, since going-concern assumptions and impairment of assets need to be considered.
What is the difference between a statutory audit and a tax audit?
A statutory audit under the Companies Act verifies that your financial statements give a true and fair view. A tax audit under Section 44AB of the Income Tax Act verifies specific tax-related information reported in Form 3CD. The same CA can conduct both in the same year — and for efficiency this is usually preferable. They have different legal bases, different forms, and different due dates.
What is CARO 2020 and does it apply to my company?
The Companies (Auditor's Report) Order 2020 applies to most companies — with exemptions for one-person companies, small companies (paid-up capital below ₹4 crore and turnover below ₹40 crore), and banking/insurance companies. CARO requires the auditor to report on 21 specific matters including title deeds of immovable properties, inventory physical verification, outstanding loans, and fraud reported or observed.
What happens if I miss the tax audit deadline (September 30)?
Under Section 271B of the Income Tax Act, failure to file the tax audit report by September 30 attracts a penalty of 0.5% of total turnover or gross receipts, subject to a maximum of ₹1.5 lakh. The ITR deadline for audit-required assesses also shifts to October 31 — missing this further triggers penalties under Section 234F. These penalties are avoidable if the audit is started early enough.
Can my internal auditor and statutory auditor be the same person?
The Companies Act does not prohibit the statutory auditor from also conducting the internal audit. For governance reasons, many boards prefer to separate the roles. We can conduct both for small companies where the cost of two separate firms is disproportionate.
Our previous auditor signed off every year in two days without asking a single question. When Auranity took over, they found ₹6.8 lakh in fixed assets that had been incorrectly expensed over four years, and a TDS default that would have attracted a notice. Painful to find, but better than finding it during a tax scrutiny.
The management letter is the part I actually read. Three observations in Year 1, two in Year 2, zero in Year 3. That's the value — the audit isn't just a box you tick, it's a feedback loop on your own controls.