Statutory Audit Services for Private Limited Company: Invest in Your Growth

Private limited companies face numerous challenges in maintaining financial integrity and regulatory compliance. Statutory audit services for private limited company offer a robust solution to these challenges. They ensure accurate financial reporting, transparency, and adherence to legal requirements.

But the advantages of statutory audits don’t stop there. It also offers valuable insights into your company’s financial health, identifies areas for improvement, and helps mitigate risks. Explore with us the requirements for these audits, the area that they focus on and the benefits you can attain from hiring a trusted firm like PKC Management Consulting for statutory audits.

Statutory Audit Requirements for Private Limited Company As Per Law

Statutory audits for private limited companies in India are mandated by the Companies Act 2013. The act outlines the following  requirements for these audits: 

Appointment of Auditor

• Appointed auditor must be a chartered accountant (CA) or a firm of chartered accountants.
• The first auditor must be appointed within 30 days of company incorporation.The shareholders approve this in the first Annual General Meeting (AGM).
• An individual auditor cannot be appointed for more than one term of five consecutive years.

Audit Timelines

• The auditor must submit an audit report to the shareholders of the company at the AGM.

Reporting Requirements

• The report must be prepared according to the standards and formats prescribed by the ICAI and the Companies Act 2013.
• The auditor’s report must state whether the financial statements provide a true and fair view of the company’s financial position and performance.

Scope Of Audits

• The auditor examines the company’s books of accounts, financial statements, and other relevant documents to provide an opinion on its financial statements.
• It also includes verifying records, assessing internal controls, and checking compliance with various laws and regulations.

What Areas Are Covered by Statutory Audit Services for Private Limited Company?

Statutory audit services for private limited company cover a wide range of areas to ensure compliance and to provide a comprehensive assessment of the company’s financial health. These include:

Financial Statements Review

• Balance Sheet: Verification of assets, liabilities, and equity to ensure accuracy and proper classification.
• Income Statement (Profit and Loss Account): Examination of revenue, expenses, and profits to ensure they are recorded correctly and match supporting documents.
• Cash Flow Statement: Review of cash inflows and outflows to ensure they accurately reflect the company’s cash movements.
• Notes to Accounts: Verification of the disclosures and notes accompanying financial statements for completeness and compliance with accounting standards

Internal Controls and Compliance

• Internal Controls Evaluation: Assessment of the effectiveness of financial internal control systems to prevent and detect fraud and errors.
• Compliance with Accounting Standards: Ensuring financial statements comply with Indian Accounting Standards (Ind AS).
• Compliance with Statutory Requirements: Ensuring compliance with laws such as the Companies Act, GST, and Income Tax Act.

Verification of Records and Transactions

• Verification of Financial Records: Examination of books of accounts, ledgers, journals, and other financial records.
• Revenue and Receivables: Verification of revenue recognition policies, accounts receivable, and provision for doubtful debts.
• Expenses and Payables: Review of expenses, accounts payable, and accruals for legitimacy and accurate recording.
• Loans and Borrowings: Examination of loans and borrowings for authorization, recording, and disclosure.

Assets, Inventory, and Taxation

• Fixed Assets and Depreciation: Verification of fixed assets, acquisitions, disposals, and depreciation.
• Inventory Verification: Physical verification of inventory for accuracy and correct valuation.
• Equity and Reserves: Verification of share capital, reserves, and surplus.
• Taxation: Verification of tax-related transactions, including direct and indirect taxes (e.g., income tax, GST), and ensuring appropriate tax provisions and timely filing of tax returns.

Risk, Fraud, and Reporting

• Fraud Detection and Risk Assessment: Identifying indicators of fraud or risk and assessing the overall risk environment.
• Related Party Transactions: Review of transactions with related parties for arm’s length conduct and proper disclosure.
• Subsequent Events: Review of events after the balance sheet date for impact on financial statements.
• Management Representation: Obtaining representations from management on financial statement accuracy and completeness.
• Audit Report Preparation: Preparation and presentation of the statutory audit report with the auditor’s opinion on financial statement fairness and compliance.

Benefits of PKC’s Statutory Audit Services for Private Limited Company

With 30+ years of work experience and a team of highly qualified professions, choosing PKC Management Consulting for statutory audit services can be a game changer for your Private Limited Company in the following ways:

360-Degree Audit Assurance:

PKC’s audit services cover both statutory compliance (Companies Act 2013) and tax regulations (Income Tax Act). This comprehensive approach includes a thorough review of financial statements, tax calculations, depreciation, related party transactions, and potential disallowances, ensuring you’re fully compliant and minimizing the risk of oversights.

Preemptive Tax Defense:

Our team understands the intricacies of tax regulations and common triggers for scrutiny. This knowledge allows us to proactively identify potential red flags and address them before they escalate into tax notices or penalties. 

Streamlined Accounting Processes: 

Leveraging our experience in over 300 finance consulting and automation projects, PKC Management Consulting will help you streamline accounting processes. This results in faster GST/TDS return turnarounds, improved accuracy through validations and controls, quicker ledger reconciliations, and faster book closures, saving time and resources.

Data-Driven Decision Making: 

We meticulously reconcile financial data across multiple sources, including GST turnover, 26AS, and statutory liabilities. This ensures the accuracy of your financial records, reducing the risk of discrepancies and enabling you to make informed financial decisions based on reliable data.

Financial Fitness Boost:

At PKC Management Consulting, we go beyond compliance. Our consulting expertise helps strengthen balance sheets by optimizing financial ratios and improving overall financial health. This, in turn, makes it easier for private limited companies to secure funding, as their financial standing becomes more attractive to lenders and investors. 

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