Audit Requirements and Process Guide

Quick Answer

A statutory audit under the Companies Act, 2013 is mandatory for every private limited company, public company, and section 8 company, irrespective of turnover or profitability. The auditor is appointed by shareholders at the AGM and reports primarily under sections 139-147. The first auditor must be appointed by the Board within 30 days of incorporation.

Who needs a statutory audit

Every company registered under the Companies Act, 2013 must appoint an auditor. The threshold for compulsory tax audit under section 44AB of the Income-tax Act is separate — businesses crossing the prescribed turnover limits (typically ₹1 crore or ₹10 crore depending on the regime) must also have a tax audit.

Key steps

1. Board resolution appointing the first auditor within 30 days of incorporation.
2. File ADT-1 with the Registrar of Companies within 15 days of appointment.
3. The auditor conducts the audit and reports on the financial statements.
4. Board adopts the audited accounts and the auditor’s report.
5. AGM is held within 6 months of the financial year-end.
6. File AOC-4 (financial statements) within 30 days of the AGM.
7. File MGT-7 (annual return) within 60 days of the AGM.

Common pitfalls

• Missing the ADT-1 filing attracts a fine of ₹300 per day on the company.
• Re-appointing a retiring auditor without a fresh resolution creates a void.
• Using the same individual auditor for 5 consecutive years is non-compliant.
• Disregarding CARO (Companies Auditor’s Report Order) reporting requirements.

Next steps

Use our annual compliance checklist to track every filing, or speak to our team for end-to-end annual ROC filing with statutory audit support.

When this guide applies

Use this guide when you need a practical, plain-English explanation of the topic for an Indian business or taxpayer. We assume you already know the basics of Indian taxation and compliance — this guide focuses on the specific situations, deadlines, and pitfalls that matter in real filings.

Step-by-step process

1. Confirm the trigger event — turnover threshold, registration requirement, or compliance deadline that brings this topic into scope for your business.
2. Gather the documents you need (PAN, Aadhaar, GSTIN, bank statements, or the specific records called out in the linked forms).
3. File or register through the official portal (income tax e-filing, MCA, GST, FSSAI, or the relevant regulator). Keep acknowledgement numbers.
4. Pay any fee or tax due. Note the challan reference for your records.
5. Track the SLA — most approvals arrive in 3-30 working days; escalate through the regulator’s grievance portal if delayed.

Common pitfalls

• Filing after the due date without paying the late fee — penalty compounds per month under Section 234F for ITR, per return period for GST.
• Using the wrong ITR form or business code — leads to defective return notice under Section 139(9) and a fresh round of filing.
• Ignoring state-specific requirements (professional tax, shop & establishment, state GST registration) when operating across multiple states.

When to escalate

Talk to an expert if the situation involves cross-border transactions, notice from the department, or disputed turnover. Self-filing works for the routine cases but escalates quickly once a notice arrives.

Next steps

For a personalised check, use our eligibility wizards and free code search tools. To file end-to-end, see the linked service pages on FinTax24.