Internal Audit

According to the Companies Act 2013, there is a rule that companies need to have an internal auditor. This internal auditor can either be a chartered accountant, a cost accountant, or another professional chosen by the company's board.

The objectives of Internal Audit

• Revenue Audit – Income Leakage Audit
• Compliance Audit – Taxation and other regulatory
• Payroll Audit
• Reimbursement Audit
• Procurement Audit
• Systems Audit – EDP Audit
• Stock Audit

As per Rule 13 of the Companies (Accounts) Rules, 2014, the specified types of companies mandated to engage an internal auditor or a firm of internal auditors include:

• Every listed company;
• Every unlisted public company having- Paid up share capital of fifty crore rupees or more during the preceding financial year; or Turnover of two hundred crore rupees or more during the preceding financial year; or Outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or Outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year
• Every private company having- Turnover of two hundred crore rupees or more during the preceding financial year; or Outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year