Statutory Audit Services in India

Looking for professional statutory audit services in India? EzyBiz India Consulting LLP provides statutory audit coordination, audit readiness, financial reporting and compliance support for Indian companies, foreign-owned subsidiaries, joint ventures, startups and multinational businesses.

Our Chartered Accountant-led team assists management with accounting reconciliations, audit schedules, financial statement preparation, statutory records, documentation and coordination with independently appointed statutory auditors.

Statutory audit opinions, certifications and attestations are issued by an eligible practising Chartered Accountant or CA firm appointed in accordance with applicable law. Audit coordination and accounting support are undertaken subject to applicable independence and conflict-of-interest requirements.

Quick Answer: Every company incorporated under the Companies Act, 2013 is generally required to have its annual financial statements audited, regardless of turnover, profit or business activity. The statutory auditor examines the financial statements and expresses an independent opinion under the applicable financial reporting framework.

With over 20 years of professional experience, EzyBiz India supports businesses with audit-related coordination, accounting, taxation and corporate regulatory requirements. Explore our wider Audit and Assurance Services in India.

Contact our team: +91 98992 17778 | anil@ezybizindia.in | WhatsApp.

What Is a Statutory Audit in India?

A statutory audit is an independent examination of financial statements conducted under applicable legislation. For Indian companies, the principal legal framework is the Companies Act, 2013, read with applicable accounting standards and Standards on Auditing.

Meaning and Objectives of Statutory Audit

The principal objective is to enable an independent auditor to express an opinion on whether financial statements present a true and fair view in accordance with the applicable financial reporting framework. An audit provides reasonable assurance, not an absolute guarantee, that financial statements are free from material misstatement.

Legal Framework Under the Companies Act

Sections 139 to 147 of the Companies Act, 2013 govern important aspects of auditor appointment, eligibility, powers, duties, reporting, prohibited services and related responsibilities. Section 143 specifically addresses the powers and duties of auditors.

Refer to the Companies Act, 2013 and the Ministry of Corporate Affairs for applicable statutory provisions and amendments.

Difference Between Statutory, Tax and Internal Audit

Particulars	Statutory Audit	Tax Audit	Internal Audit
Principal law	Companies Act or other applicable legislation	Income-tax legislation	Section 138 where applicable, or voluntary engagement
Primary objective	Financial statement assurance	Tax compliance and prescribed reporting	Governance, risk and internal control evaluation
Primary stakeholders	Shareholders and other stakeholders	Tax authorities and taxpayers	Management and Board
Reporting	Independent auditor’s report	Prescribed tax audit reports	Management or Audit Committee reports

For related requirements, explore our Tax Audit Services in India and Internal Audit Services in India.

Statutory Audit Applicability in India

Private Limited and Public Limited Companies

Every company incorporated under the Companies Act, 2013 is generally required to have its annual financial statements audited. This requirement applies irrespective of turnover, profit, loss or whether the company has commenced commercial operations.

One Person Companies and Section 8 Companies

One Person Companies and Section 8 companies are also subject to applicable statutory audit requirements. Certain procedural relaxations may be available depending on the company’s classification, but such relaxations should not be confused with a general exemption from statutory audit.

Dormant Companies and Companies Without Transactions

A company with dormant status or no significant business activity must still assess its applicable accounting, audit and annual filing obligations. The absence of commercial transactions does not automatically remove statutory audit requirements.

LLPs and Other Business Entities

Limited Liability Partnerships are governed by the LLP Act and related rules rather than the company audit provisions of the Companies Act. Audit applicability depends on the relevant LLP thresholds, exemptions and amendments. Partnerships, trusts, societies and other entities are subject to their respective legal frameworks.

Appointment of Statutory Auditors Under Section 139

Appointment of the First Auditor

Under Section 139(6) of the Companies Act, 2013, the Board of Directors of a company other than a Government company must appoint its first auditor within 30 days from the date of registration of the company. If the Board fails to make the appointment, it must inform the members, who must appoint the first auditor within 90 days at an Extraordinary General Meeting. The first auditor holds office until the conclusion of the first Annual General Meeting.

For Government companies and other companies covered by the relevant Government-company provisions, the appointment procedure is governed separately by Section 139(7), involving the Comptroller and Auditor General of India and the prescribed statutory timelines.

Appointment at the First AGM and Subsequent Tenure

Under Section 139(1), a company generally appoints its statutory auditor at its first Annual General Meeting to hold office from the conclusion of that meeting until the conclusion of its sixth AGM, subject to applicable eligibility, rotation and other statutory requirements. Subsequent appointments are governed by the relevant provisions of Section 139.

Form ADT-1 Filing Requirements

For auditor appointments covered by Section 139(1), the company is required to inform the Registrar of Companies within 15 days of the relevant meeting, using Form ADT-1 in accordance with the prescribed rules.

The substituted Form ADT-1 introduced under the Companies (Audit and Auditors) Amendment Rules, 2025 includes options for first-auditor appointments. However, the applicability of mandatory ADT-1 filing to appointments under Section 139(6) has been the subject of a formal clarification request by ICSI. Companies should verify the latest MCA clarification, applicable form instructions and filing position before determining compliance for a first-auditor appointment.

Auditor Rotation and Casual Vacancy

Auditor rotation applies to listed companies and other prescribed classes of companies under Section 139(2) and the relevant rules. Individual auditors and audit firms are subject to the applicable tenure and cooling-off requirements.

Casual vacancies are governed by Section 139(8). For a non-Government company, the Board ordinarily fills a casual vacancy within 30 days. Where the vacancy arises from resignation, the appointment must also be approved by the company at a general meeting convened within three months of the Board’s recommendation. Separate rules apply to Government companies.

Eligibility, Independence and Restrictions on Statutory Auditors

Qualifications and Disqualifications Under Section 141

Section 141 prescribes who may be appointed as a statutory auditor and the circumstances resulting in disqualification. The appointed auditor must satisfy applicable professional eligibility, independence, indebtedness, business relationship and audit-limit requirements.

Prohibited Services Under Section 144

Section 144 prohibits the statutory auditor from providing specified services directly or indirectly to the audited company or its holding or subsidiary company. These include accounting and bookkeeping, internal audit, certain financial information system services, investment advisory, investment banking, outsourced financial services and management services, among others.

Consequently, any audit-readiness, accounting or advisory support provided by EzyBiz India must be assessed separately from the independent statutory audit engagement to ensure compliance with applicable independence restrictions.

Our Statutory Audit Coordination and Readiness Services

Pre-Audit Financial Statement Readiness

We assist management in assessing whether accounting records, trial balances, supporting schedules, reconciliations and financial statement disclosures are complete and internally consistent before audit fieldwork begins.

Accounting Reconciliations and Audit Schedules

Our support may include bank reconciliations, vendor and customer ageing, fixed asset registers, inventory records, loan schedules, intercompany balances, provisions and other financial statement supporting documents.

Coordination With Independent Statutory Auditors

We assist management in organising documents, tracking audit queries, coordinating explanations and maintaining audit schedules. The independent statutory auditor determines the audit procedures, evaluates evidence and issues the final audit opinion.

Statutory Audit Process and Methodology

Audit Planning and Risk Assessment

The independent auditor obtains an understanding of the business, accounting framework, internal controls and risks of material misstatement. Audit planning considers materiality, significant transactions and areas requiring professional judgement.

Audit Fieldwork and Verification

Audit procedures may involve inspection of records, external confirmations, analytical procedures, observation, inquiries, recalculations, control testing and substantive verification. The nature and extent of testing depend on the auditor’s risk assessment.

Audit Completion and Final Reporting

Before issuing the report, the auditor evaluates audit evidence, identified misstatements, financial statement disclosures, management representations and relevant subsequent events.

Our Statutory Audit Checklist for Companies explains important records and documentation requirements.

Financial Statement Areas Covered During Statutory Audit

Revenue, Purchases and Operating Expenses

Audit procedures may address revenue recognition, customer contracts, sales cut-off, purchases, expense classification, provisions, supporting documentation and compliance with applicable accounting policies.

Assets, Inventory and Borrowings

Important areas include fixed assets, depreciation, inventory existence and valuation, bank balances, investments, loans, receivables, payables and other financial obligations.

Related Parties, Provisions and Financial Disclosures

Related-party transactions, accounting estimates, contingent liabilities, provisions and significant disclosures require appropriate documentation and evaluation under the applicable accounting framework.

Internal Financial Controls and Statutory Audit

Internal Financial Controls Over Financial Reporting

Internal financial controls help ensure reliable accounting records, appropriate authorisation of transactions, safeguarding of assets and preparation of financial statements. The requirement for separate auditor reporting on internal financial controls depends on Section 143(3)(i) and applicable exemptions.

Control Testing and Identifying Weaknesses

Relevant controls may include payment authorisations, bank reconciliations, maker-checker procedures, system access, inventory controls, journal-entry approvals and segregation of duties.

For broader operational and compliance-focused assessments, see our Internal Audit Services in India.

CARO 2020 and Statutory Audit Reporting

Applicability of CARO 2020

The Companies (Auditor’s Report) Order, 2020 prescribes additional reporting requirements for companies falling within its scope. Certain categories of companies are exempt, subject to the conditions prescribed in the Order.

Applicability should be assessed based on the company’s classification and relevant financial parameters for the reporting period.

Important CARO Reporting Clauses

CARO reporting may cover property, plant and equipment, inventory, loans and advances, statutory dues, borrowings, related-party transactions, fraud reporting, internal audit, cash losses and other prescribed matters.

The independent statutory auditor is responsible for determining the applicable reporting clauses and conclusions.

Statutory Audit for Foreign-Owned Indian Subsidiaries

Annual Audit Requirements for Foreign Subsidiaries

An Indian company owned by an overseas parent generally remains subject to statutory audit under Indian company law. Foreign ownership does not exempt an Indian subsidiary from applicable financial statement audit requirements.

Businesses establishing Indian operations can explore our India Market Entry Consulting Services and Wholly Owned Subsidiary Registration in India.

Group Reporting and Intercompany Reconciliations

Foreign-owned subsidiaries may need to prepare group reporting schedules, reconcile intercompany balances, document management charges and explain differences between Indian financial reporting requirements and overseas group accounting policies.

FEMA, Transfer Pricing and Local Regulatory Compliance

Audit readiness may require documentation relating to foreign investment, intercompany transactions, transfer pricing, GST, TDS, statutory liabilities and regulatory filings, where relevant to the financial statements and agreed scope.

Statutory Audit for Joint Ventures and Newly Incorporated Companies

Audit Considerations for Indian Joint Ventures

Joint ventures may require particular attention to shareholder agreements, capital contributions, related-party transactions, management charges, financial reporting obligations and governance arrangements.

Businesses considering this structure can explore our Joint Venture Registration Services.

First-Year Audit of Newly Incorporated Companies

New companies should establish accounting records, appoint eligible auditors, maintain incorporation and share capital documentation, record banking transactions and preserve supporting evidence from inception.

Our Company Registration Services in India assist with incorporation, while our audit-readiness services support subsequent accounting and annual reporting requirements.

Documents Required for Statutory Audit in India

Financial and Accounting Documents

• Trial balance and general ledger
• Draft financial statements and notes
• Bank statements and reconciliations
• Customer and vendor ageing reports
• Fixed asset and depreciation schedules
• Inventory and stock records
• Loan, investment and borrowing schedules
• Provisions and accounting estimates

Tax, Corporate and Regulatory Records

• GST returns and reconciliations
• TDS returns and challans
• Income-tax records and assessments
• Payroll and statutory contribution records
• Board and shareholder resolutions
• Statutory registers and ROC filings
• Material contracts and related-party agreements
• Previous audit reports and outstanding observations

For additional details, refer to our Detailed Statutory Audit Checklist.

Statutory Audit Reports and Types of Audit Opinions

Unmodified and Qualified Audit Opinions

An unmodified opinion indicates that the auditor concludes the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.

A qualified opinion may be appropriate where a material misstatement is not pervasive or where the auditor cannot obtain sufficient appropriate evidence and the possible effects are material but not pervasive.

Adverse Opinion and Disclaimer of Opinion

An adverse opinion may be issued where identified material misstatements are pervasive. A disclaimer may be appropriate where the auditor cannot obtain sufficient appropriate audit evidence and the possible effects of undetected misstatements could be both material and pervasive.

The independent auditor determines the appropriate opinion under the applicable Standards on Auditing.

Statutory Audit Timeline and ROC Filing Compliance

Audit Planning and Completion Timeline

The statutory audit timetable depends on the company’s accounting readiness, transaction volumes, financial reporting complexity, availability of documents and applicable statutory deadlines.

Companies should begin audit preparation sufficiently early to allow for financial statement approval and completion of annual compliance obligations.

Financial Statement Approval, AGM and AOC-4 Filing

Companies must comply with the applicable provisions governing financial statement approval, Annual General Meetings and filing with the Registrar of Companies.

Under Section 137, financial statements are generally required to be filed within 30 days of the AGM, subject to the applicable statutory provisions, special situations, exemptions and extensions. The relevant form may be AOC-4, AOC-4 XBRL or another prescribed variant.

Refer to the Ministry of Corporate Affairs for current filing requirements.

Statutory Audit Fees and Engagement Scope

Factors Affecting Statutory Audit Fees

Statutory audit fees depend on company size, business activities, number of locations, transaction volumes, financial reporting complexity, applicable standards, audit risks and the professional effort required.

Audit Readiness and Coordination Support

EzyBiz India assists with audit readiness, financial statement preparation, reconciliations, supporting documentation and coordination with independent auditors. The statutory audit engagement, including audit fees and reporting responsibilities, is separately determined by the eligible appointed practising CA or CA firm.

Why Choose EzyBiz India for Statutory Audit Support?

Experienced Chartered Accountant-Led Team

Our professionals bring over 20 years of experience in accounting, taxation, corporate compliance, financial reporting and business advisory services.

Integrated Accounting, Tax and Regulatory Knowledge

We understand how accounting, GST, TDS, corporate law, FEMA, payroll and regulatory compliance interact with financial statement preparation and audit documentation.

Support for Multinational and Growing Businesses

We assist foreign-owned subsidiaries, joint ventures and expanding Indian companies with group reporting, accounting reconciliations, local compliance documentation and communication with overseas finance teams.

Foreign investors planning Indian operations may also review our Setting Up Business in India guide.

Frequently Asked Questions About Statutory Audit in India

Is statutory audit mandatory for every private limited company?

Generally, yes. A company incorporated under the Companies Act is required to have its annual financial statements audited even if it has low turnover, no commercial activity or has incurred losses.

Who can be appointed as a statutory auditor?

A statutory auditor must be eligible under Section 141 of the Companies Act, 2013. The appointment is ordinarily made from eligible practising Chartered Accountants or CA firms, subject to applicable professional and independence requirements.

Can a statutory auditor also perform internal audit?

Section 144 prohibits a company’s statutory auditor from providing internal audit services to the audited company and specified related entities. The statutory restrictions and professional independence requirements must be observed.

Do foreign-owned Indian subsidiaries require statutory audit?

Yes. An Indian subsidiary of a foreign company is generally required to comply with the statutory audit provisions applicable to Indian companies, regardless of foreign ownership.

How much does statutory audit cost in India?

Fees vary according to company size, complexity, locations, financial reporting requirements and audit effort. A proposal should be obtained after evaluating the company’s financial records and applicable audit scope.

What happens if statutory audit is delayed?

Delays can affect financial statement approval, annual ROC filings and other compliance requirements. The consequences depend on the relevant statutory provisions and the nature of the default.

Contact EzyBiz India for Statutory Audit Services

EzyBiz India Consulting LLP supports Indian companies, foreign-owned subsidiaries, joint ventures and growing businesses with statutory audit readiness, accounting reconciliations, financial reporting and coordination with independent statutory auditors.

Mobile: +91 98992 17778

Email: anil@ezybizindia.in

WhatsApp: Speak With Our Audit Team

Related Services

• Audit and Assurance Services in India
• Internal Audit Services in India
• Tax Audit and Certification Services
• Statutory Audit Checklist
• Statutory Audit Meaning and Applicability
• India Market Entry Consulting
• Wholly Owned Subsidiary Registration
• Company Registration Services

Prepared By: EzyBiz India Consulting LLP

Reviewed By: CA Anil Agrawal, Chartered Accountant, with over 20 years of professional experience in accounting, taxation, audit-related advisory and regulatory compliance. Statutory audit opinions and attestations are issued independently by eligible appointed practising Chartered Accountants or CA firms.

Last Updated: November 2026

Disclaimer: This article is intended for general information and does not constitute legal, accounting, auditing, taxation or regulatory advice for any specific company. Statutory audit applicability, auditor appointment, Form ADT-1 filing requirements, auditor independence, CARO applicability, financial reporting obligations and statutory deadlines depend on applicable law, amendments, regulatory clarifications and individual circumstances. EzyBiz India provides audit-related coordination and readiness support, while statutory audit opinions and attestations are issued by independently appointed eligible practising Chartered Accountants or CA firms. Professional advice should be obtained before taking compliance decisions.