1. Introduction:
An Annual Audit is a mandatory or voluntary financial review of a business’s records conducted by a Chartered Accountant (CA) or an independent auditor. It ensures compliance with accounting standards, tax laws, and business regulations.
📢 Latest Update (FY 2024-25): Businesses crossing ₹10 crore turnover (with 95%+ digital transactions) are exempted from mandatory tax audit under Section 44AB.
📌 Applicable Laws:
- Companies Act, 2013
- Income Tax Act, 1961
- GST Act
- ICAI Guidelines
📜 2. Types of Audit Required for Businesses in India
| Type of Audit | Applicable For |
| Statutory Audit | Private/Public companies under Companies Act |
| Tax Audit | Businesses/professionals with income over limits set under Sec 44AB |
| GST Audit | If turnover exceeds ₹5 crore (voluntary since FY 2021–22) |
| Internal Audit | Large companies, trusts, NGOs |
| Stock Audit | For inventory-heavy businesses |
| Compliance Audit | For startups and fintech under RBI/SEBI |
🧑💼 3. Who Needs Annual Business Audit?
✅ Mandatory for:
- All Private Limited & Public Companies
- LLPs exceeding ₹40 lakh turnover
- Individuals/proprietors with income over ₹50 lakh or turnover over ₹1 crore (digital: ₹10 crore)
👨⚖️ Recommended for:
- Funded startups
- NGOs & Trusts
- Businesses applying for loans, tenders, or investments
🤝 4. Why Choose a Professional Audit Service?
While audits can technically be done in-house, professionals bring:
- Regulatory knowledge
- Risk identification
- Financial transparency
- Clean audit trails for investors, banks, and IT department
🛡️ Avoid penalties and scrutiny with expert assistance.
📝 5. Step-by-Step Annual Audit Process in India
Step 1: Appointment of Auditor
Appoint a CA or audit firm (file ADT-1 with MCA for companies).
Step 2: Planning & Documentation
Auditor gathers data, prepares audit strategy.
Step 3: Fieldwork
Auditor verifies books, vouchers, invoices, ledgers, GST returns, bank statements.
Step 4: Reporting
Audit report is issued in Form 3CA/3CB & 3CD or Form 10B (for trusts).
Step 5: Filing with Authorities
Upload to:
🏛️ MCA Portal: https://www.mca.gov.in
🏛️ Income Tax Portal: https://www.incometax.gov.in
📄 6. Required Documents for Audit
- PAN, TAN, GST of entity
- Financial Statements
- Ledger books & vouchers
- Income Tax & TDS returns
- Bank statements
- ROC filings
- Loan or investment agreements
📎 Also include Board Meeting Minutes and audit committee reports (for companies).
💰 7. Cost Involved
| Entity Type | Estimated Audit Cost (INR) |
| Small business / SME | ₹5,000 – ₹15,000 |
| Private Limited Co. | ₹15,000 – ₹40,000 |
| Large corporations | ₹50,000 – ₹2,00,000+ |
Note: Government audit filings (like Form 10B or 3CD) carry no fee.
⏳ 8. Time Taken for Audit Completion
- Small businesses: 5–10 days
- Mid-sized companies: 10–20 days
- Complex audits: 30+ days
📆 Filing Deadline: Usually 30th September (tax audit) or as notified by MCA/IT Dept.
⚠️ 9. Common Mistakes to Avoid
- Missing audit deadlines
- Not filing ADT-1 or MGT-7
- Not reconciling GST vs books
- Ignoring non-cash transactions
- Choosing an unregistered auditor
🔍 These may result in Section 271B penalty (₹1.5 lakh or 0.5% of turnover).
📞 10. Call-to-Action (CTA)
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❓ 11. FAQs
Q1. Is audit mandatory for all businesses?
No. It depends on entity type and turnover threshold.
Q2. What is the penalty for not doing an audit?
Up to ₹1.5 lakh under Section 271B of the IT Act.
Q3. Is GST audit still mandatory?
No, it’s optional since FY 2020-21, but internal audit is advisable for high turnover.
Q4. Can a company do its own audit?
Only through an independent CA or audit firm. Self-auditing isn’t allowed.
Q5. What is the timeline for tax audit filing?
Usually by 30th September following the financial year.
