Audit of the Business in India

Audit & Audit Society

The audit of a Business is defined as a thorough analysis of the financial health of an organization. It is mentioned in the annual report by someone independent of the respective organization. In other words, it refers to more organized and independent scrutiny of an organization's books, accounts, business documents and vouchers to determine the organization's financial statement's authenticity and validity. In addition, the process also aims to ensure a ubiquitous phenomenon in the corporate and the public sector that academics started identifying an "Audit Society". 

What is an Audit Report?

The respective Auditor understands the propositions before them for analysis, procures evidence, evaluates the same, and generates an opinion based on his analysis conveyed in the form of his audit report.

How does one define an Auditing procedure?

Globalization and modernization have many upsides and downsides in today's dynamic business environment. Auditing is an important business activity in any business entity and must be performed with high professionalism. Audits of company accounts have been compulsory in India since the passing of the first Companies Act in 1913.

Due Dates for filing Audit and ITR

• For Corporate Assessees  (Like Private Limited & Public Limited Companies) and all other corporate assessments, the due date for furnishing his return of income is 30th September of the Assessment Year.
• For Non-Corporate Assessees  (Like Partnership Firms & Proprietorships Firms), who are required to obtain a Tax Audit Report (TAR) under section 44AB of the Act: It is also applicable to all other corporate assessments. The due date for furnishing his return of income is 30th September of the Assessment Year.

Auditing Procedure for a Salaried Employee

For any other Assessees Like Salaried Income, a Person having Income from House property, Interest income, or Business Income where accounts are not required to be audited, the due date for furnishing his return of income is 31st July of the Assessment Year. If your total income, like salary, rent received, interest on deposit etc., exceeds the taxable limit of Rs2.5 lacs, you must submit an Income Tax return in the prescribed form ITR 1 ITR 2 ITR 3... Depending on the nature of income. Even if your taxable income is less than as prescribed every year, you must claim a refund for the TDS collected from you and submit the Tax Return.

Company Audit Importance

A company audit is vital as it presents the true picture of the state of affairs of an entity. It helps understand and assess risks and evaluates the internal controls and checks. In addition, it also ensures maximum utilization of the available resources along with timely identification of liabilities, including contingent ones.

Why do you need to audit your Business?

• If you are a service provider such as a Doctor, Advocate etc., with a turnover of more than 15 lacs per year
• If you own a Private Limited Company
• Other businesses with a turnover of greater than 1 Crore

Registrationwala's audit services can help you with a comprehensive, professional approach to company auditing that yields practical solutions, not complicated reports. Our specialists and services always concentrate on bringing value - presenting you the insight and foresight across your Business as a single entity to manage the future head-on.

Eligibility Criteria for filing Audit of the Business in India

There are no eligibility criteria for getting our Auditing services for your Business. However, to audit your Business in an informed manner, we require you to:

• Be upfront about your transactions
• Provide us access as per requirement
• Ensure that your compliances are met

How does a Business appoint an Auditor?

The Auditor's appointment in a company is mandatory for the Annual General Meeting. He must be appointed every following year. The auditors appointed at the AGM must hold the office from the conclusion of the current Annual Meeting at which his appointment took place till the conclusion of the next Annual Meeting of the Company's Board.

From this, you can access that the appointment of an auditor is not in the hands of the Company's directors. Such powers are always vested in the general body of shareholders. But, the auditors for business inspection must be appointed by the Board of Directors for the first time. His appointment must occur within one month from the date of the Business's incorporation with the MCA.

The appointed Auditor must hold the office until the conclusion of the first AGM of the registered Business. In any case, if the BoD fails to appoint its first Auditor, then the Company must appoint him or her at the general meeting.

Who can a Company or LLP appoint as their Auditor?

As per the Companies Act of 1956, any individual who is a Chartered Accountant within the means of the Chartered Accountants Act of 1949 can be a designated auditor for a Business. In addition, the appointed Auditor must first hold a certificate of practice. For a Partnership Firm, if all its member partners are Chartered Accountants holding a valid practicing certificate, then any member partner can be appointed as an Auditor of that Firm or LLP. In the case of a Partnership, the appointment as an auditor can be made in the firm's name. Also, any of its member partners can act in the firm's name.

The following entities can act as an Auditor of a registered Business:

Company Personnel or Appointed Officer

• A partner of personnel of the applicant Company
• An Employee of personnel of the applicant Company
• Individuals indebted to the Company for a sum of more than one thousand rupees
• Individuals who have guaranteed to the Company on behalf of someone a sum of more than one thousand rupees
• Individuals holding any security of the Company, after one year from the date of commencement of CAA of 2000 (Companies Amendment Act)

Auditors, if he becomes subject to disqualification after the appointment, then he will have to vacate the seat.

Audit of a Branch Office

As per the Companies Act of 1956, the Auditor must audit its financial records if a public or private company has a branch office. The appointment can accomplish the given task of financial accounts of the branch office by any of the following:

• Company's Auditor
• Someone qualified to be the Company's Auditor

For branches positioned outside India, a person duly qualified to act as the Auditor must be in accordance with the laws of that country to become the Auditor of that branch. In case the Auditor chooses not to audit the branch, then he can visit the branch office if he considers it due necessary for the inspection procedure. It is one of his duties as an Auditor. He can access at all times the books, accounts and vouchers of the hiring Company maintained at the concerned branch office.

Documents required for filing Audit of the Business in India

Every registered Company must file the following documents along with the auditing details form with the MCA to further its claim of successful legal functioning:

• The Identification proofs of the directors/person/partners
• The PAN card of the business entity and the directors/person/partners
• Financial Statements required
• Other documents pertaining to auditing services

Process for filing Audit of the Business in India

Following is the process we implement to provide an Audit of the Business in India:

1. Contacting the client
2. Asking the client for access to financial statements
3. Getting appointed as an Auditor
4. Assessing the client's statements
5. Creating and auditing reports for the Business

Our Assistance in filing the Audit of the Business in India

We at Registrationwala provide end-to-end solutions for filing Audits of the Business. Our services include:

• Collection of information and starting the process
• Creating the first compliance draft
• Reviewing the draft and making changes if necessary
• Creation of Audit report
• Providing you with the confirmation receipt.

Registrationwala.com is a leading legal consultancy firm providing comprehensive services relating to business audits.

Contact us now to get a seamless insight into your Business.