March 8, 2021

Is an Audit a Mandatory Requirement For Your Business?

For stakeholders together with authorities, buyers, clients and shareholders it’s miles necessary to make certain if the man or woman is following the guidelines detailed underneath various laws. Hence the authorities has added the concept of Audit. Mainly it’s far for the benefit of the buyers.

What is Auditing?
An audit consists of checking of economic statistics, books of money owed, registers in accordance with applicable laws. The tax audit is carried on by way of the Auditor- Chartered Accountant in Practice. It is to check the accuracy of the financial statements. It is one of the vital compliances at the give up of every financial yr.

The due date to publish the tax audit record is 30th September of the Assessment yr.

Following folks are required to audit their money owed.

Proprietorship and Partnership Firm
A tax audit is obligatory for each proprietorship and partnership firms if the turnover or gross receipts in a economic yr exceeds Rs. 1 crore
In case of a professional profits, the audit is mandatory if gross receipts in a financial yr exceed Rs. 50 lakhs
If such character is opting for the Presumptive Taxation Scheme then if a person announces taxable profits beneath the boundaries prescribed under the presumptive tax scheme and has income exceeding the basic threshold restrict
Limited Liability Partnership
According to the LLP Act, whose turnover exceeds Rs. Forty Lakh or whose contribution exceeds Rs. 25 Lakh ought to compulsorily audit its books of bills
According to the Income Tax Act, every commercial enterprise whose turnover or gross receipts in a monetary year exceeds Rs. 1 crore is chargeable for a tax audit
If the Partners of the LLP need to get their books of bills audited voluntarily then it ought to be done in accordance with the rule of thumb
LLP can not choose Presumptive Taxation Scheme
Under Companies Act, it is mandatory for each employer to audit its books of money owed

Is an Audit a Mandatory Requirement For Your Business?
Is an Audit a Mandatory Requirement For Your Business?

If any man or woman fails to audit its books of account, it is liable for a penalty of 0.5% of overall sales, turnover or gross receipts or Rs 1, 50,000 whichever is decrease besides for any reasonable purpose.

Other forms of Audit
GST Audit
It is accomplished to confirm the statistics maintained by means of the registered man or woman. Further, it’s far to test whether the due tax has been paid and whether or not the refund has been claimed efficaciously or now not.

It is applicable to following registered persons.

If turnover exceeds Rs. 2 Crore in a financial year
The GST branch may also bypass an order for accomplishing GST Audit
Cost Audit
It is relevant to each organisation specified in Table (A) of rule three (Regulated Sectors)

If overall annual turnover from all services and products
In the right away previous F.Y
Is Rs. 50 crore or extra, and
Aggregate turnover of character product/s or carrier/s for which cost statistics are required to be maintained
Is Rs. 25 crore or greater
Further, it’s far relevant to each company specified in Table (B) of rule 3 (Non-regulated Sectors)

If overall annual turnover from all its products and services
In the without delay previous F.Y
Is Rs. A hundred crore or extra, and
Aggregate turnover of the individual product/s or provider/s for which fee statistics are required to be maintained
Is Rs. 35 crore or extra
The requirement of Cost Audit isn’t always relevant to the subsequent businesses:

Whose revenue from exports in foreign exchange is greater than 75% of its general revenue
A Company working from a Special Economic Zone
A Company engaged in the technology of strength for captive consumption through Captive Generating Plant
Secretarial Audit
Every enterprise has to observe various legal guidelines and guidelines. The Secretarial audit is for checking whether such groups have complied with all of the relevant laws and guidelines. The secretarial audit is carried on by using a Company Secretary in Practice.

It is relevant to the subsequent agencies.

Listed Company
Public Company if the paid-up percentage capital is Rs. 50 Crore or more
Public Company if its turnover is of Rs. 250 Crore or greater
Every Private business enterprise that’s a subsidiary of a public organisation as mentioned above

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