Last updated . Thresholds and dates reflect notifications in force on this date.
More than a statutory requirement
Banks read your financial statements before sanctioning a loan. Investors read them before putting money in. The tax department reads them during assessment, and your own board uses them to decide what to do next. An audit is what gives all of them confidence in the numbers.
A good audit also works for you. It shows where controls are weak, where money is leaking and where the next notice is likely to come from, while there is still time to act.
An independent examination of your financial statements, ending in an opinion on whether they give a true and fair view under the applicable accounting standards and law.
Independent comfort on matters beyond the annual accounts: internal controls, processes, regulatory compliance, or specific figures that a bank, buyer or regulator needs verified.
Three principles behind every engagement
Independence
Our opinion has to hold up for the people who rely on it, so we stay independent of the numbers we audit. For a company, that means we do not also maintain its books.
Risk-based focus
We spend our time where errors and fraud are most likely, rather than ticking every voucher with the same weight.
Business insight
Every audit ends with practical recommendations on controls, processes and governance, written for management and not for auditors.
What changed for audits in 2026
This has been one of the busiest years for audit rules in a decade. A new income tax law is in force, many more companies now count as "small", and auditors are into the third year of audit trail reporting. Here is what matters for you.
Section 44AB becomes Section 63
The new Act applies from 1 April 2026. From tax year 2026-27, tax audits fall under Section 63, and Forms 3CA, 3CB and 3CD are replaced by a single Form 26 in four parts. The ₹1 crore, ₹10 crore and ₹50 lakh limits stay the same.
For you: audits of FY 2025-26, due this year, still use the old forms. Plan your 2026-27 books for the new format now.
Small company limits more than doubled
By notification G.S.R. 880(E) dated 1 December 2025, a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore can now qualify as a small company. The earlier limits were ₹4 crore and ₹40 crore.
For you: qualifying companies drop out of CARO 2020 reporting and, if they are not in default of filing financial statements or annual returns, the auditor's report on internal financial controls. The audit itself stays mandatory.
Edit logs are now a standard audit check
Since 1 April 2023, every company using accounting software must use one that records an audit trail of each change, which cannot be switched off. Auditors report on this under Rule 11(g), and the logs must be kept for 8 years.
For you: an older Tally or Excel setup without edit logs can lead to a remark in your audit report. Check your software before year end.
Late tax audit penalty becomes a fixed fee
For FY 2025-26 audits, Section 271B still applies: 0.5% of turnover or gross receipts, capped at ₹1,50,000, and it can be waived for reasonable cause. From tax year 2026-27, the Finance Act, 2026 replaces this with a fixed fee under Section 428(c) of the Income-tax Act, 2025: ₹75,000 if the report is up to one month late and ₹1,50,000 after that.
For you: the new fee is automatic, so from next year even a short delay has a fixed cost. A late audit also delays your return and any refund.
Our audit services
Statutory Audit
Companies Act, 2013, Sections 139 to 148 · LLP Act, 2008
An independent opinion on whether your financial statements give a true and fair view, as required by law. Banks, investors, tax authorities and the Registrar of Companies all rely on it, so the quality of this report shapes how others see your business.
- Audit under the Standards on Auditing issued by ICAI
- Testing of revenue, expenses, assets and liabilities, including third-party confirmations
- CARO 2020 reporting on fixed assets, inventory, loans, statutory dues and more
- Reporting on internal financial controls where applicable
- Audit trail (Rule 11(g)) verification and reporting
- A clear management letter with practical fixes, not just a signed report
Expert note: listed companies, and larger unlisted ones above prescribed capital or borrowing limits, must rotate auditors. An individual can serve one term of five years and a firm two terms of five years each.
Tax Audit
Section 44AB, Income-tax Act, 1961 · Section 63, Income-tax Act, 2025
A detailed check of your books so that your tax return rests on verified figures. The tax audit report covers everything from depreciation and TDS compliance to cash transactions and payments to related parties, and the tax department uses it to pick cases for scrutiny.
- Tax audit report in Form 3CA/3CB and 3CD for FY 2025-26, and Form 26 from tax year 2026-27
- Reconciliation of your books with Form 26AS, AIS and GST returns before filing
- Review of disallowances such as late MSME payments and cash payments over the limit
- Identification of tax exposures and positions likely to be questioned in assessment
- Transfer pricing report (Form 3CEB) coordination where needed
Expert note: the ₹10 crore higher limit only works if both cash receipts and cash payments stay within 5%. One large cash transaction can pull you back to the ₹1 crore limit, so we check this before year end.
Internal Audit
Section 138, Companies Act, 2013 · Rule 13, Companies (Accounts) Rules, 2014
A continuous check on how well your processes work, carried out during the year rather than after it. Internal audit finds leakages, weak approvals and compliance gaps while you can still act on them.
- Risk-based audit plan agreed with management or the audit committee
- Process reviews for procurement, sales, inventory, payroll and treasury
- Revenue leakage, cash management and expense controls
- SOP compliance, IT access controls and fraud prevention checks
- Import and export cycle reviews, including customs and GST documentation
- Quarterly reports with findings ranked by risk and a follow-up tracker
Expert note: internal audit is mandatory for many unlisted companies too, based on paid-up capital, turnover, borrowings or deposits. Many private companies cross the ₹200 crore turnover limit without noticing that internal audit becomes mandatory from the following year.
Risk Assessment & Internal Control Reviews
Section 134(5)(e) and Section 143(3)(i), Companies Act, 2013
We document, test and strengthen the controls behind your financial reporting, so that your auditor's opinion on internal financial controls is clean and your team knows who approves what.
- Risk and control matrices (RCM) for key processes
- Design and operating effectiveness testing
- Segregation of duties and access reviews in your accounting software
- Approval hierarchies and a delegation of authority matrix
- Vendor, credit and cyber risk review, with automation opportunities
- Fraud risk assessment and anti-leakage checks
Expert note: where banks have sanctioned working capital limits above ₹5 crore in aggregate against current assets, CARO clause 3(ii)(b) asks the auditor to report whether the quarterly stock and debtor statements filed with the bank agree with the books. A mismatch is one of the most common findings.
Other assurance engagements
Industries we audit
Every sector has its own risk areas, so our audit programme changes with the business. For importers and exporters we look closely at customs and GST documentation and the realisation of export proceeds. For manufacturers, at inventory valuation and costing. For service companies, at revenue recognition and unbilled revenue.
Do you need an audit?
A quick guide to the main audit requirements. Most growing businesses fall under at least one of these.
| Who | Audit | When it applies | Law |
|---|---|---|---|
| Every company, including OPCs | Statutory audit | Always, whatever the turnover or profit | Companies Act, s.139 & s.143 |
| LLPs | Statutory audit | Turnover above ₹40 lakh, or contribution above ₹25 lakh | LLP Rules, Rule 24(8) |
| Businesses (any entity) | Tax audit | Turnover above ₹1 crore, or above ₹10 crore if cash receipts and payments are each within 5% | s.44AB (1961) / s.63 (2025) |
| Professionals | Tax audit | Gross receipts above ₹50 lakh | s.44AB (1961) / s.63 (2025) |
| Presumptive taxpayers | Tax audit | FY 2025-26: under 44ADA, profit below 50% with income above the basic exemption limit; under 44AD, leaving the scheme within the five-year lock-in with income above the exemption limit. From tax year 2026-27, Section 63 requires an audit where profit declared is below the presumptive rate | s.44AD / s.44ADA, s.63 (2025) |
| Listed & larger unlisted companies | Internal audit | Unlisted public: paid-up capital ₹50 crore+, turnover ₹200 crore+, borrowings above ₹100 crore, or deposits ₹25 crore+. Private: turnover ₹200 crore+ or borrowings above ₹100 crore | s.138, Rule 13 |
| Companies (with exclusions) | CARO 2020 reporting | All except banks, insurers, Section 8 companies, OPCs, small companies, and private companies (not a holding or subsidiary of a public company) with paid-up capital plus reserves within ₹1 crore, bank or FI borrowings not above ₹1 crore at any time in the year, and total revenue including other income within ₹10 crore | s.143(11) |
| GST registered businesses | Annual reconciliation | GSTR-9C self-certified reconciliation where aggregate turnover exceeds ₹5 crore | CGST Rules, Rule 80 |
This is a summary for general guidance. Exact applicability depends on your entity's figures and the notifications in force. Share your last two years' financials and we will confirm what applies.
Key dates for the FY 2025-26 audit cycle
For entities with a financial year ending 31 March 2026. The CBDT sometimes extends dates, but only an official notification counts, so plan for the dates below.
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30 Sep 2026
Tax audit report for non-transfer pricing cases, Form 10B / 10BB audit reports for charitable trusts and NGOs, and the last date for company AGMs (within six months of year end).
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Within 15 days of AGM
Form ADT-1 for appointment or reappointment of the auditor.
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30 Oct 2026
LLP Form 8, the Statement of Account and Solvency.
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Within 30 days of AGM
Form AOC-4, filing of audited financial statements with the ROC.
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31 Oct 2026
Income tax return for audited cases, plus the tax audit and Form 3CEB for transfer pricing cases.
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30 Nov 2026
Income tax return for transfer pricing cases.
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Within 60 days of AGM
Form MGT-7 / MGT-7A, the company annual return.
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30 May 2027
LLP Form 11, the LLP annual return.
How we run an audit
A structured process built on ICAI's Standards on Auditing, with no surprises at the end.
Understand the business
We learn how you earn, spend and record money, and where errors or fraud are most likely (SA 315).
Plan and set materiality
A written plan with timelines, the areas we will focus on, and a document request list up front (SA 300, SA 320).
Test controls
We check approvals, access rights and audit trail settings, so that we can rely on your systems where they work.
Verify balances
Confirmations, vouching, physical verification and data analytics on ledgers, stock and receivables.
Discuss findings early
Issues are shared as we find them, not in the final week, so that you can correct entries before sign-off.
Report and follow up
A signed report, a plain-language management letter, and a check-in on the fixes before next year's audit.
Technology-enabled, judgement-led
Where the data allows, we run analytics on full ledgers instead of small samples: duplicate payments, round-sum entries, entries posted on holidays or outside working hours, and unusual vendor patterns. Tools widen our coverage. The judgement is still ours.
What auditors are flagging most often
These issues come up again and again in SME and mid-sized company audits. Each one is easy to fix before year end and costly after.
Audit trail switched off
Software without edit logs, or with logging disabled for part of the year, leads to a direct remark under Rule 11(g).
Late payments to MSMEs
Since FY 2023-24, dues to micro and small enterprises unpaid beyond 45 days (15 days without a written agreement) are disallowed until actually paid.
Stock statements that do not match
For companies with working capital limits above ₹5 crore, quarterly stock and debtor figures filed with the bank that differ from the books must be reported under CARO clause 3(ii)(b).
Cash over the limits
Cash receipts of ₹2 lakh or more, or cash expense payments above ₹10,000 to one party in a day, lead to penalties or disallowances.
GST input credit gaps
Input tax credit in the books that does not match GSTR-2B and GSTR-3B is a frequent source of notices and audit adjustments.
Related party transactions
Rent, loans or purchases with directors' relatives or group entities without the required approvals or disclosures.
Documents to keep ready
Having these ready on day one usually shortens the audit by a week or more.
- Trial balance, general ledger and previous year's audited accounts
- Bank statements and bank reconciliation statements for all accounts
- Fixed asset register with purchase invoices for additions
- Stock records, valuation working and physical count sheets
- Debtor and creditor ageing, with balance confirmations
- GST returns (GSTR-1, 3B, 9) and the GSTR-2B reconciliation
- TDS returns, challans, Form 26AS and AIS
- Loan agreements, sanction letters and stock statements given to banks
- Statutory registers, board and shareholder minutes
- Previous year's audit report, CARO report and management letter
Why clients choose us for audits
- Founder-led. Direct founder involvement and accessibility on every engagement, so you are never passed around. As a proprietorship, every audit report is signed by CA Sejal Patel.
- A strong team bench. CA Bhoomi, our Audit and Compliance Lead, and a team of 10+ experienced professionals work under direct founder supervision.
- Risk-focused method. Effort goes where the risk is, which keeps audits thorough without dragging on.
- No surprises. Findings are discussed with you before the report, with time to correct entries.
- On time. A shared compliance calendar and document list from day one keep deadlines on track.
- Confidential. Your data is handled under the confidentiality duties of the ICAI Code of Ethics.
- Verifiable reports. Every audit report and certificate we sign carries an ICAI UDIN, so banks and authorities can confirm it is genuine.
Frequently asked questions
Is a statutory audit mandatory for a private limited company with very low turnover?
Yes. Every company registered under the Companies Act, 2013, including private limited companies and One Person Companies, must have its financial statements audited every year, regardless of turnover or profit. Even a company with zero revenue needs an audit.
What is the difference between a statutory audit and a tax audit?
A statutory audit is required by company or LLP law and gives an opinion on your financial statements as a whole. A tax audit is required by the Income-tax Act and checks your books for tax purposes, with the auditor reporting specific details in a prescribed form. A company above the tax audit limit needs both, and we can do them together in one engagement.
What is the tax audit limit for FY 2025-26?
A business needs a tax audit if turnover exceeds ₹1 crore. The limit rises to ₹10 crore if cash receipts and cash payments are each within 5% of the total. A professional needs a tax audit if gross receipts exceed ₹50 lakh. Presumptive taxpayers may also need an audit: under Section 44ADA if profit declared is below 50% and income exceeds the basic exemption limit, and under Section 44AD if they leave the scheme within the five-year lock-in and income exceeds the basic exemption limit.
What changes for tax audits under the Income-tax Act, 2025?
The new Act applies from 1 April 2026. For tax year 2026-27 onwards, tax audit moves from Section 44AB to Section 63, and Forms 3CA, 3CB and 3CD are replaced by a single Form 26. The ₹1 crore, ₹10 crore and ₹50 lakh limits stay the same, but a late audit report now attracts a fixed fee instead of a penalty, and the audit trigger for presumptive taxpayers who declare lower profits is worded differently. Audits of FY 2025-26, due in 2026, are still done under the 1961 Act and the old forms.
What is the penalty for not getting a tax audit done on time?
For FY 2025-26, the penalty under Section 271B of the Income-tax Act, 1961 is 0.5% of turnover or gross receipts or ₹1,50,000, whichever is lower, and it can be waived if you show reasonable cause. From tax year 2026-27, the Finance Act, 2026 replaced this penalty with a fixed fee under Section 428(c) of the Income-tax Act, 2025: ₹75,000 for a delay of up to one month and ₹1,50,000 after that. A late audit also delays your return and any refund.
Can the same CA maintain our books and also audit them?
Not for a company. Section 144 of the Companies Act, 2013 bars a statutory auditor from providing accounting and bookkeeping services to the company. Your statutory auditor also cannot be your internal auditor. ICAI's guidance also bars the person who maintains your accounts, or your internal auditor, from signing your tax audit report. Independence is what gives an audit its value.
Our company now qualifies as a small company. What does that mean for our audit?
From 1 December 2025, a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore can qualify as a small company. Small companies are exempt from CARO 2020 reporting and, if they are not in default of filing financial statements or annual returns, from the auditor's report on internal financial controls. They also have lighter filing requirements. The statutory audit itself is still mandatory. Holding and subsidiary companies, Section 8 companies and companies governed by a special Act cannot be small companies.
Is an audit only needed because the law requires it?
No. Many businesses choose an audit voluntarily, for example to raise funds, prepare for a bank loan or an acquisition, give comfort to partners or family shareholders, or simply to strengthen controls as they grow. The same audit work can then serve several stakeholders.
Can an audit detect fraud?
An audit gives reasonable assurance, not a guarantee. Under SA 240, auditors assess fraud risk, test journal entries and look for unusual transactions, which often brings red flags to light. If you suspect fraud, a focused forensic review or special audit is the better tool, and we can scope one for you.
How often should internal audits be done?
Most growing businesses benefit from quarterly or half-yearly internal audits, so that issues are fixed during the year. Larger organisations often move to a continuous programme, with high-risk areas like payments and inventory reviewed every month.
How long does an audit take?
It depends on the size of the business and how ready the books are. For most SMEs, once the complete trial balance and documents are shared, fieldwork is usually done in a few weeks. The checklist above is the fastest way to shorten it.
This page is general information for businesses and is not professional advice for any specific situation. Laws, thresholds and due dates change through notifications and circulars. Please consult us before acting on it.