PoSH Consultancy

Financial Audit

Are you aware of the importance of financial audits in India? As a business owner or investor, it’s crucial to ensure that your financial accounts are accurate and trustworthy. That’s where financial audits come in. In this blog post, we’ll delve into the world of financial audits in India, exploring what they are, their types, and how they increase transparency and build trust among stakeholders. So, let’s dive in and explore the world of financial audits!

1. What is a financial audit in India?

Financial audit is an essential process in India to maintain the transparency and accuracy of an organization’s financial statements. According to India Briefing News, audits in India are classified as statutory and internal audits. Statutory audits are mandatory for all companies in India, and the audit report is created in a form prescribed by the government department. On the other hand, internal audits are conducted at the request of internal management in order to analyze an organization’s operational efficiency. Every company whose shares are registered on the stock exchange or whose paid-up share capital is Rs 500 million or more must have an internal auditing system. In addition, tax audits are mandatory for individuals, partnerships, and companies meeting specific criteria. The Companies Act 2013 prescribes the provisions for Company Audits. The financial audit process is conducted every fiscal year (April 1 to March 31) and is crucial for maintaining an organization’s credibility and soundness of investment decisions. The process helps organizations improve their financial performance and ensure compliance with financial laws and regulations.