Audit and Cirtification Under the Companies ACT, 2013
AUDIT AND CERTIFICATION UNDER THE COMPANIES ACT, 2013
There are several audits and certifications prescribed with specific purpose. They are laid down with different criterias and thresholds and are conducted by companies to observe mandatory and event-based compliances.
Certification of Annual Return
Annual Return of prescribed companies need certification from independent professional in order to ensure that the contents of the return filed are disclosing correct and adequate information pertaining to the financial year to which it relates. The certificate from such professional is necessary to be attached with the annual return.
Applicability
every listed company
every company having-
• paid up share capital >= Rs. 10 cr. or
• turnover >= Rs. 50 cr.
Internal Audit
The growth and expansion in the operational activities of the company calls for a system of internal audit. It helps in scheduling the mandatory and event-based compliances. It evaluates the effective systems laid down for identifying and managing the risks. The appointed auditing personnel reports on the day-to-day affairs of the company and make it compliant with laws and regulations.
Applicability
every listed company
every unlisted public company having-
• paid up share capital >= Rs. 50 cr. during the preceding financial year (F.Y.) or
• turnover >= Rs. 200 cr. during the preceding F.Y. or
• outstanding loans or borrowings from banks or public financial institutions > 100 cr. at any point of time during the preceding F.Y. or
• outstanding deposits >= Rs. 25 cr. at any point of time during the preceding F.Y.
every private company having-
• turnover >= Rs. 200 cr. during the preceding F.Y. or
• outstanding loans or borrowings from banks or public financial institutions >= Rs. 100 cr. at any point of time during the preceding F.Y
Corporate Social Responsibility(CSR) Audit
CSR is a concept introduced to measure the impact of growing and big companies on the society and the environment. It is a societal responsibility that a company assumes and commits to the society to contribute their success in its development and for specific social causes. The business operations of the company integrate with social, environmental and economic concerns of the country and make a positive impact on the community welfare. The prescribed companies undertake CSR activities with a view to discharge its CSR obligation.
Applicability
Every company having-
- net worth >= Rs. 500 cr. during the immediately preceding financial year (F.Y.) or
- turnover >= Rs. 1000 cr. during the immediately preceding F.Y. or
- net profit >= Rs. 5 cr. during the immediately preceding F.Y.
The requirement of CSR Audit is necessary under Companies (Corporate Social Responsibility Policy) Rules, 2014 which calls for monitoring and reporting mechanism for CSR activities, if such activities are undertaken through third party being Section 8 company or Registered Trust or Registered Society having track record of minimum three years in undertaking similar programs or projects or entity established by Government or under an Act of Parliament or State Legislature.