Mandatory Internal Audit Guidelines under Companies Act

As per Section 138 of the Companies Act, 2013 the following set of companies are required to comply with the requirement of mandatory Internal Audit: –

(a) every listed company;

(b) every unlisted public company having-

  1. paid up share capital of Rs. 50 Crores or more during the preceding financial year; or
  2. turnover of Rs. 200 Crores or more during the preceding financial year; or
  3. outstanding loans or borrowings from banks or public financial institutions exceeding Rs. 100 Crore or more at any point of time during the preceding financial year; or
  4. outstanding deposits of Rs. 25 Crore or more at any point of time during the preceding financial year;

(c) every private company having-

  1. turnover of Rs. 200 Crore or more during the preceding financial year; or
  2. outstanding loans or borrowings from banks or public financial institutions exceeding Rs. 100 Crore or more at any point of time during the preceding financial year:

The above set of companies are required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit of the functions and activities of the company. The Internal Auditor may be either an individual or a partnership firm or a body corporate.

The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.

Leave a Comment

Your email address will not be published. Required fields are marked *

error: You are not allowed to use Right Click on this page. - KKACA