Board & Management are responsible for maintaining books of account, related records, laying down effective accounting policies, internal controls, preparation of annual financial statements, and ensuring that the financial statements are in compliance with accounting standards.
It is mandatory required by every Company to get its Financial Statement Audited under Indian Companies Act.
The Statutory auditor provides independent assurance to all stakeholders that Financial Statements are free from any misstatements, about the truth & fairness of the entity’s financial statements. The auditor examines the records produced before him, obtains evidence, evaluates the same, and formulates an opinion on the basis of his professional skepticism & judgment that is communicated through his audit report.
2. Tax Audit
Tax Audit is an audit made compulsory by the Income Tax Act, 1961 if annual gross turnover/receipts of the assess exceed the specified limit. Tax audit is conducted under Section 44AB of the Income Tax Act, 1961 by a Chartered Accountant.
3. Transfer Pricing Certification and documentation
Taxpayers are required to maintain, on an annual basis, a set of extensive information and documents relating to international transactions undertaken with Associated Enterprises (AEs) or specified domestic transactions. Rule 10D of the Income Tax Rules, 1962 prescribes detailed information and documentation that is to be maintained by the taxpayer
4. Goods & Service Tax (GST) Audit
Audit under GST involves the examination of records, returns, and other documents maintained by a person registered under GST. It also ensures the correctness of turnover declared, input tax credit availed, taxes paid, refund claimed and other such compliances under GST Act to be checked by an authorized expert.
GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes, and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and GST Audit is one of them.
5. Internal Audit
Internal audit is carried out on the specific instruction of the Management and mandatory for some clients. It is also called the Management Audit. This is a regular exercise & periodicity (monthly/quarterly/half-yearly/yearly) depends upon the quantum of work.
A review of the internal systems of accounting & control is conducted in order to ensure that errors, if any, are rectified in a timely manner. It also helps in improving the existing systems of accounting & internal control. Special purpose audits are also conducted at the request of Management.
6. Investigation Audit
The Investigation Audit is carried out at the request of Management in a situation of fraud or misappropriation of funds in any organization.
7. Internal Control over Financial Reporting (ICFR)
Now it has become mandatory for the Board of Directors of all companies to state in their report the adequacy of internal financial controls with reference to the financial statements.
Further, Rule 10A of Companies (Audit & Auditors) Rules 2014 states that for the financial years commencing on or after April 01, 2015, the report of the auditor should state about the existence of adequate internal financial controls and its operating effectiveness.
8. Certification under various Tax and Other Laws
9. Other Audit as specified under any Law