An independent audit of your financial statements under the Companies Act, 2013.
A Statutory Audit is an independent evaluation of a company's financial statements mandated by the Companies Act, 2013. Its primary objective is to provide a true and fair view of a company's financial health to stakeholders, regulators, and the public. In today’s rapidly evolving regulatory landscape, a statutory audit is far more than a compliance checkbox; it is a critical corporate health check.
Under the latest regulatory framework, the scope of statutory audits has significantly expanded. Auditors are now required to rigorously evaluate the audit trail (edit log) in accounting software, ensuring it remains active throughout the financial year without any tampering. The scope also includes stricter scrutiny of Internal Financial Controls (IFC), transitioning from limited management testing to comprehensive, documented verification across procurement, sales, payroll, and financial reporting cycles.
Furthermore, reporting requirements under the Companies (Auditor's Report) Order, 2020 (CARO 2020) demand unprecedented transparency. Key focus areas now include granular disclosures on inventory discrepancies, revaluation of Property, Plant, and Equipment (PPE) and intangible assets by Registered Valuers, and the strict reconciliation of quarterly statements with books of accounts for working capital limits. Compliance with new wage definitions for employee statutory benefits and heightened reporting requirements under the Companies act further underscore the meticulous nature of modern statutory audits.
Mandatory ApplicabilityEvery company registered under the Companies Act, 2013—regardless of size, turnover, or whether it had zero transactions—must undergo an annual statutory audit.
Strict DeadlinesThe statutory audit must typically be completed before the Annual General Meeting (AGM), generally by September 30th.
Severe PenaltiesNon-compliance with statutory audit provisions is taken seriously, leading to heavy fines for the company and potential board disqualification for directors under Section 164(2).
No. A statutory audit is legally mandatory for every registered company under the Companies Act, 2013, regardless of its operational status, turnover, or profitability during the financial year.
A Statutory Audit is legally mandated by the government to ensure financial statements present a true and fair view to external stakeholders. An Internal Audit is a management tool (mandatory only for companies crossing specific turnover or borrowing thresholds) used to evaluate operational efficiency, risk management, and internal controls.
Using software without an active, unalterable audit trail is a direct violation of the Companies Act. The statutory auditor is legally obligated to report this non-compliance as a qualification in your final audit report.
Only an independent, practicing Chartered Accountant (CA) or a CA firm holding a valid Certificate of Practice from the Institute of Chartered Accountants of India (ICAI) can be appointed as a statutory auditor.
CARO 2020 vastly increases your disclosure burden. Your auditor must now report on highly specific details, including inventory discrepancies, loans to related parties, instances of cash losses, whistle-blower complaints, and whether quarterly bank returns perfectly match the company's internal books.
A qualification simply flags a specific issue. We discuss findings with you in advance and, where possible, help you resolve them before the report is finalised.
Tell us a little about your requirement and our team will get back to you with the right guidance and a clear next step.
