Internal Audit

Internal Audit is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization. It is an independent, objectives assurance and consulting activity designed to add value and improve an organization’s operations. It helps organization to accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and government process.

With increased regulatory focus and widespread negative impact of frauds, the managements and senior executives are increasingly concerned about the vulnerability and exposure of their businesses/ organisations to frauds and whether or not they are adequately protected. This emphasizes the need of internal audit in fraud risk management.

Mandatory Requirement For Internal Audit In India

Section 138 of the Act was enforced with effect from 1st April 2014. As per section 138 of the Companies Act, 2013, such class or classes of companies as may be prescribed shall be required to appoint an internal auditor to conduct internal audit functions and activities of the company. Accordingly, such classes or classes of companies have been prescribed in Companies (Accounts) Rules, 2014 by Ministry of Corporate Affairs. The following class of companies shall be required to appoint an internal auditor namely ,

• Listed companies : –   Appointment of an internal auditor is mandatory

• Unlisted public company and private companies : –   Appointment of an internal auditor is mandatory if either of the following criteria are met

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Unlisted Public Companies

• Paid Up share Capital of Rs. 50 Crore or more, or

• Turnover of Rs. 200 Crore or more, or

• Outstanding loans or borrowings from banks or public financial institutions of Rs. 100 Crore or more, or

• Outstanding deposits of Rs. 25 crore or more.

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Private Companies​

• Turnover of Rs. 100 Crore or more, or

• Outstanding loans or borrowings from banks or public financial institutions of Rs. 200 Crore or more.

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*to be checked for the preceding financial year

However, a company can also on sole discretion opt for internal audit even if it does not qualify for the mandatory requirements due to several benefits stated above.

Working in the capacity of an internal auditor, we provide following services:

• Risk Assessment and development of risk based audit plan;

• Evaluating the adequacy of the system of internal controls;

• Recommend improvements in controls;

• Assess compliance with policies and procedures and sound business practices;

• Assess and ensure compliance with legal and contractual obligations.

• Review operations/programs to ascertain whether results are consistent with established objectives and whether the operations/programs are being carried out as planned.