Tax & corporate
Statutory audit services for companies
A delayed or defective audit holds up your AOC-4 and exposes the company and its officers to penalties. Our in-house Chartered Accountant conducts and signs the audit, and we file before and after it.
- Audit by our in-house Chartered Accountant
- ADT-1 filed on appointment
- Report under the auditing standards
- AOC-4 filed without penalty
The auditor
Who can audit your company
Every company appoints an auditor under section 139. The Act is strict about who that can be, and about what else the auditor may do for the same company.
Only a Chartered Accountant
A company's auditor must be a Chartered Accountant, or a firm in which most partners practising in India are Chartered Accountants. In a firm or LLP, only the partners who are Chartered Accountants may sign.
People who cannot audit you
An officer or employee of the company cannot be its auditor, and nor can their partner or employee. Holding securities in the company, or owing it more than the prescribed amount, also disqualifies.
Services the auditor cannot add
Section 144 bars the auditor from providing accounting and bookkeeping, internal audit, outsourced financial services and management services to the company, its holding company or its subsidiary. Other services need approval from the Board or audit committee. We check this before we accept an audit.
Rotation for larger companies
Listed companies, and the classes of company the rules prescribe, cannot keep an individual auditor beyond one term of five years, or an audit firm beyond two. A five-year gap follows before either can return.
How the audit runs
From appointment to the signed report
A statutory audit runs on the company's own calendar. It starts with an appointment and ends with the audited accounts on the Registrar's file, and each stage leaves a record behind it.
- 01
Appointment
The Board appoints a new company's first auditor within 30 days of registration, until the first AGM. At that AGM the members appoint an auditor until the end of the sixth AGM. Before either, the auditor gives written consent and a certificate of eligibility under section 141.
ADT-1 filed within 15 days
- 02
Access to the books
The auditor has a right of access at all times to the books of account and vouchers, wherever they are kept. Officers can be required to give information and explanations. The Act also directs inquiry into specific points, such as loans shown as deposits and personal expenses charged to revenue.
Books and vouchers examined
- 03
Statutory dues
We review the year's PF, ESI, TDS and GST, so that dues not deposited, or deposited late, are known before the report is written. Under CARO 2020, the auditor reports on whether undisputed statutory dues were deposited regularly.
Observations on statutory dues
- 04
Board approval
The Board approves the financial statements. They are signed by the chairperson, or by two directors including any managing director, with the CEO, CFO and company secretary where appointed. Only then do they go to the auditor for the report.
Signed financial statements
- 05
The auditor's report
The report to the members states whether the accounts give a true and fair view. It also says whether proper books were kept, whether they agree with the accounts, and whether the accounting standards were followed. Any qualification is reported with its reasons.
Signed auditor's report
- 06
Adoption and filing
The members adopt the audited accounts at the AGM. Within 30 days they are filed with the Registrar in AOC-4, certified by a professional in whole-time practice.
AOC-4 filed
The cost of non-compliance
What a delayed audit costs the company
An audit that starts late, or an auditor appointed the wrong way, delays everything that depends on the audited accounts.
Exposure under the law
Source
₹25,000–5 lakh
for the company
01Auditor rules not followed
For a contravention of the provisions on appointing, rotating, removing or reporting by the auditor. Every officer in default faces ₹10,000 to ₹1 lakh.
Companies Act, 2013, s.147(1)
Up to ₹2 lakh
for the company
02Audited accounts filed late
AOC-4 cannot go in until the audit is done. A late filing costs ₹10,000 plus ₹100 a day, and up to ₹50,000 for each officer.
Companies Act, s.137(3)
5 years
director disqualification
03Accounts unfiled for three years
Directors of a company that has not filed financial statements for three continuous years cannot be reappointed, or appointed elsewhere, for five years.
Companies Act, s.164(2)(a)
Why NK One
Every filing, zero penalties.
Your audit is planned to finish before the AGM, and ADT-1 and AOC-4 are filed inside their windows, so no penalty attaches to the company or its officers.
Zero-penalty guarantee
No late fees, no interest, no surprise demands on anything we file for you. Every due date is tracked by people who have done this for 20 years.
Direct partner access
Since 2007, clients speak to the partners who run NK One, not a new compliance executive learning on your account.
Scope of service
The audit, and the filings around it
Our in-house Chartered Accountant conducts the audit. We handle the MCA filings on either side of it.
- File01
Auditor appointment
At incorporation, and at each AGM that appoints or reappoints.
- Our Chartered Accountant appointed as your statutory auditor
- Written consent and certificate of eligibility
- ADT-1 filed with the Registrar within 15 days of the meeting
- File02
The statutory audit
Conducted under the standards on auditing.
- Audit of the financial statements
- Review of statutory dues such as PF, ESI, TDS and GST
- Auditor's report to the members
- File03
After the audit
Filed through our ROC and MCA filing service.
- Audited financial statements filed in AOC-4
- Annual return filed in MGT-7 or MGT-7A
Why NK One
An auditor inside a compliance practice
Statutory audits are conducted and signed by our in-house Chartered Accountant. Every client has a dedicated relationship manager, and we reply within two working hours.
- Year we started, in Bengaluru
- 2007
- Years our founder has worked in compliance
- 25
- Client retention
- 85%
FAQ
Questions about statutory audit
Can't find your answer? Ask us on WhatsApp and we'll reply within 2 working hours.
Does every company need a statutory audit?
Yes. Section 139 of the Companies Act, 2013 requires every company to appoint an auditor. The auditor reports to the members on whether the financial statements give a true and fair view of the company's affairs, following the standards on auditing.
Who can be appointed as a company's statutory auditor?
Only a Chartered Accountant, or a firm, including an LLP, in which most of the partners practising in India are Chartered Accountants. Section 141 also disqualifies certain persons, such as officers or employees of the company being audited.
Who conducts and signs our audit?
Our in-house Chartered Accountant is appointed as your statutory auditor, conducts the audit and signs the auditor's report. We then complete the MCA filings around it.
Can our auditor also provide other services to us?
Only some. Section 144 bars a company's auditor from providing certain services to the company, its holding company or its subsidiary. They include accounting and bookkeeping, internal audit and outsourced financial services. We confirm which of our services can be combined with the audit before we take it on.
How is the auditor appointed, and for how long?
A new company's first auditor is appointed by the Board within 30 days of registration and holds office until the first AGM. At the first AGM, the members appoint an auditor who holds office until the end of the sixth AGM. The company informs the auditor and files ADT-1 with the Registrar within 15 days of the meeting.
Is a statutory audit the same as a tax audit?
No. The statutory audit is under the Companies Act and reports to the members. A tax audit under section 44AB of the Income-tax Act, 1961 is a separate report. Where the accounts are already audited under another law, it is made in Form 3CA-3CD, due one month before the return's due date.
Can we change our statutory auditor before the term ends?
Only through a set process. An auditor can be removed before the end of the term only by special resolution, with the Central Government's prior approval, after a reasonable opportunity to be heard. An auditor who resigns files a statement of reasons with the company and the Registrar within 30 days.
What does a statutory audit cost?
Send us an enquiry with your company's details and last year's financial statements, and we will come back with a quote.
Related
Related services
ROC & MCA filings
Annual returns and financial statements filed with the ROC, and DIR-3 KYC.
Income tax filing
Income tax returns for every type of entity, including revised and updated returns.
Compliance risk audits
Labour law compliance due diligence and gap assessments of your processes and your vendors' processes.
Enquiry
Talk to a compliance expert
Share your states and headcount, and we will get back to you within 2 working hours.
- Call+91 98457 40938
- WhatsApp+91 98457 40938
- Emailinfo@nkonehrsolutions.com
- Head office, Bengaluru1163, 9th Main, 11th A Cross, Nagapura, Mahalakshmipuram, near Rajajinagar Metro Station, Rajajinagar 1st Block, Bengaluru, Karnataka 560086
