An audit is simply when someone outside your business examines the financial information of the business, and later, gives their opinion on them. An audit is done to supply information to the stakeholders of the company. A Statutory Audit shows to everyone whether or not one can rely on the information provided by the company/LLP.
A Statutory audit is a compulsory audit. It is required by law for certain types of businesses to conduct an audit every year.
The below classification will bifurcate who is required to get statutory audit:
As an Individual, or an HUF or a Partnership firm, you need not conduct a Statutory audit. (Note: You might be required to get audited under Income Tax Audit on fulfilling certain criteria)
If your business is an LLP – Limited Liability Partnership, you need to conduct a statutory audit only if your revenue exceeds Rs.40 lakhs in a year, or if the contribution made by the partners into the LLP exceed Rs. 25 lakhs.
If you are running a company (Private Limited or Public Limited), a stat audit is mandatory every year – no matter the revenue, or capital or size. Even if the company has incurred a loss, or has not conducted operations, it has to get a statutory audit done, and file its Annual Returns.
An audit is only to be conducted by a CA in practice or a firm of CAs in practice.
If audit is not done within time, it will attract a base fine of Rs. 1,00,000.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
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