Private Limited Company Audit

The Annual Statutory Audit is a combined plan and a challenging mandatory process because of the micro-analysis and investigation of financial accounts. However, if a company prepares its audit well, it becomes a part of its compliance and helps improve the company in both financial and operational aspects.

What is a private limited company?

A Private Limited company is the most common form of beginning a company. It gives the advantage of higher goodwill, more credit, and favors over other business forms.

What are the audit compliances of a Private Limited Company?

The audit compliance and the requirements for the compliances are listed below:

• Appointment of Auditor: Every company is expected to designate an auditor within thirty days of establishing the business. A company can initially appoint an external auditor for the first year of the company's audit through form ADT-1.
• Annual Statutory Audit: Every company is expected to get its financial statement audited by a CA. Even when the company is not active or has zero turnovers, it is mandatory to conduct an Annual Statutory Audit.
• Income Tax Audit: Every business compulsively files an Income Tax Return yearly. Taxes for the same are expected to be deposited quarterly, known as Advance Tax. A tax audit is needed if the business's annual turnover is Rs 1 crore or more. Chartered Accountants (CA) conduct a tax audit.

What are the requirements of a private limited company audit?

The requirements of the private limited company audit are:

• Auditors are required to know the company’s business with the recent details. They need to understand the business, which is done by providing them with the necessary information. These include - Corporate Structure, Operational details, and Processing.
• Auditing is an exhaustive paperwork method and can be time-consuming. Maintain a schedule with a checklist of chores and papers to be provided accompanying individuals accountable for delivering the said documentation. The auditors get a confirmation letter about the administration representatives involved beforehand.

The main points of the audit process are as follows.
- Cash
- Stocks
- Receivables
- Payables
- Statutory Records

• Essential and significant documentation includes sales register, purchase bills, fixed assets purchased, salary and wages, VAT payments and returns, trade license, ESI paid challan outstanding, the property tax paid challans, and other documents that the auditor thinks fit. It is dependant on the quality of the internal control assessment conducted by a firm that the auditors choose what depth of Auditing is fit for a said company.
• A comprehensive audit situation behind each level of evaluation can carry informal dialogues on several physical control features and analysis of the audit process. Companies can request auditors for development.

The audit report is produced when the audit team has favourably approached all issues investing in the financial reports and dealings of the business. The report is then transferred to the Board of Directors of the company or the auditing committee.

The auditing method and meeting the auditing qualifications can be stimulating for companies to do on their own. Many companies may need a professional touch to ensure smooth day-to-day transactions.