Financial Statement Audit - Mandatory for Every Company, Any Size

Yes. Under the Companies Act, 2013, every registered company - private, public, or OPC - must get its annual financial statements audited, regardless of turnover, profit, or size. There is no small-company exemption from this requirement, unlike tax audit which has turnover thresholds.

A financial statement audit under the Companies Act examines your annual financial statements and applies to every company regardless of size. A tax audit under the Income Tax Act is a separate requirement that applies only once turnover crosses specific thresholds, and focuses on tax compliance rather than overall financial statement fairness.

They cover the same legal requirement. This page is written to explain the requirement in plain language for small and mid-sized private companies encountering it for the first time. Our statutory audit service page covers the fuller process - audit report formats, CARO applicability, and XBRL filing - for companies ready to start the engagement.

Yes. As long as a company remains registered with the Registrar of Companies, it must get its financial statements audited annually, even if it had no revenue or is currently dormant.

No. The audit itself is a professional service performed by a chartered accountant - there is no government fee for the audit. Government fees apply separately to the ROC annual filing (AOC-4, MGT-7) that follows the audit.

Only a practicing chartered accountant who is independent of the company - not an employee, director, or someone with a disqualifying relationship or financial interest in the company - can be appointed as its statutory auditor.

For a small private company with reasonably organised books, a typical audit takes 2-4 weeks. Companies with unreconciled books, missing documentation, or higher transaction volumes can take longer.

Non-compliance can attract penalties on the company and its officers under the Companies Act, and it also blocks the company from completing its ROC annual filing (AOC-4/MGT-7) on time, which compounds into further late-filing penalties.

Most banks and NBFCs require at least the last 1-3 years of audited financial statements before sanctioning a business loan or credit line, even for small companies, so staying current on your audits also protects your ability to raise debt.

At minimum: books of accounts, bank statements, sales and purchase invoices or GST returns for the year, and details of any related party transactions or loans. Having last year's audited financials (if not your first audit) also speeds things up.

No. The statutory auditor must be independent of the company - someone who is an employee, or otherwise closely involved in maintaining the company's books, cannot also serve as its independent auditor under the Companies Act.

CARO (Companies (Auditor's Report) Order) requires auditors to comment on specific matters beyond the standard audit opinion - such as fixed assets, inventory, and statutory dues - for most companies, though small companies and certain other categories are exempt from some CARO reporting requirements. We check applicability as part of the audit.

First audits typically take slightly longer since there's no prior audited baseline to work from, and we'll need to review opening balances carefully. We flag this upfront and build extra time into the plan for first-time engagements.

Not directly. The financial statement audit focuses on whether your financial statements give a true and fair view under the Companies Act. GST audit/reconciliation and income tax audit are separate, distinct engagements, though we can coordinate all three if needed.

Our pricing starts from ₹9,999 for small private companies with lower transaction volumes, scaling up to ₹49,999 or more for larger companies with higher transaction volumes and more complex reporting needs - we scope and quote based on your actual size and complexity.