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Company Audit

What Is Company Audit/ Annual Audit?

A Company Audit is a formal examination of a company's financial records and statements conducted by a qualified Chartered Accountant (CA) or an audit firm. The purpose is to ensure that the company's financials are accurate, fair, and comply with Indian accounting standards and legal requirements like the Companies Act, 2013.

Business startup concept

Why Company Audit /Annual Audit is important ?

  • Ensures financial transparency
  • Builds credibility with investors and banks
  • Helps in regulatory compliance
  • Prevents fraud and financial mismanagement
  • Mandatory for ROC and Income Tax filing
Legal Compliance

What Is The Purpose Of Company Audit

Verify Accuracy of Financial Statements

An audit confirms that the company’s balance sheet, profit & loss account, and cash flow statements truly reflect its financial position.

Ensure Legal Compliance

Audits ensure the company complies with:

  • Companies Act, 2013
  • Accounting Standards (AS/Ind AS)
  • Income Tax and GST laws
  • Other applicable financial regulations

Detect and Prevent Fraud

Regular audits help uncover errors, manipulation, or fraud in the company’s books — and act as a deterrent for future wrongdoing.

Build Credibility

Audited financials are trusted by:

  • Investors
  • Banks and lenders
  • Government authorities They serve as proof of financial health and transparency.

Aid in Decision Making

Management uses audit insights to:

  • Understand financial strengths and weaknesses
  • Make better budgeting, investment, and operational decisions

Mandatory Regulatory Filing

Audits are essential for:

  • ROC filings (AOC-4, MGT-7)
  • Income Tax Return filing
  • Compliance with MCA and tax authorities
Documents

Company Audit Documents Checklist?

For Private Limited Companies | As per Companies Act, 2013

Basic Company Documents

  • Certificate of Incorporation
  • Memorandum & Articles of Association (MOA & AOA)
  • PAN Card of the company
  • GST registration certificate (if applicable)
  • TAN allotment letter

Financial Statements & Reports

  • Trial Balance
  • Profit & Loss Statement
  • Balance Sheet
  • Cash Flow Statement
  • General Ledger
  • Fixed Asset Registe

Statutory Compliance Records

  • GST Returns (GSTR-1, GSTR-3B, etc.)
  • TDS Returns (Form 24Q, 26Q)
  • Income Tax Return (ITR)
  • Advance Tax challans and payment proof

ROC & Secretarial Records

  • Board Meeting and AGM minutes
  • Form AOC-4 and MGT-7 (last filed copies)
  • Statutory Registers (Members, Directors, Shares, etc.)
  • DIR-3 KYC of directors
  • Auditor appointment letter (ADT-1)

Employee & Payroll Records (if applicable)

  • Salary structure and payroll register
  • PF, ESI registration and returns
  • Employee tax deduction proofs

Miscellaneous (if applicable)

  • Agreements or contracts signed during the year
  • Any legal notices or ongoing litigations
  • Details of related party transactions


How to Prepare for Company Audit: A Founder's Guide

As a startup founder or SME owner, the word "audit" might sound intimidating — but it doesn't have to be. A company audit is simply a check to ensure your financial records are accurate and compliant with the law.

Organize Your Financial Documents

Start by collecting the key records:

  • Balance Sheet
  • Profit & Loss Statement
  • Trial Balance
  • General Ledger
  • Cash Flow Statement
  • Fixed Asset Register
  • Bank statements and reconciliations
📑

Maintain Accurate Books of Accounts

Keep your books updated monthly using software like Tally, Zoho Books, or QuickBooks. This makes it easier for auditors to validate entries.

Pro Tip: Reconcile bank statements monthly to avoid year-end panic.

Track All Financial Transactions

Ensure you have documentation for:

  • Sales & purchase invoices
  • Expense bills & receipts
  • Loan agreements
  • Investment records
  • Petty cash logs

Review Your Statutory Compliance

Check that you've:

  • Filed GST returns on time (GSTR-1, 3B, etc.)
  • Filed TDS returns and made proper deductions
  • Paid advance tax and other dues
  • Filed ROC returns (AOC-4, MGT-7)

Coordinate with Your CA

Your auditor will likely ask for:

  • Board meeting minutes
  • Auditor appointment letter
  • Previous audit reports (if any)
  • Notes on any legal disputes or financial contingencies

Stay available for queries and make communication easy.

Check for Internal Controls

Review internal processes like:

  • Who authorizes payments?
  • Who handles invoices?
  • Are roles and responsibilities clearly defined?

Why Choose Smart Tax Idea for Tax Audit in Rewa?

Need Tax Audit Help in Rewa?

If you're unsure whether a tax audit applies to you, contact us today for a free consultation.

Visit us at our Rewa office
Call/WhatsApp: [ 9340997450 ]
Email: [smarttaxidea@gmail.com]