Expert verified In the financial calendar of a company, few milestones are as important as the statutory audit. For many organizations, however, completing the audit on time without last-minute panic remains a challenge.
The timeline for completing a statutory audit follows a sequence of structured activities that require coordination among the company’s finance team, statutory auditors, and sometimes internal auditors or tax advisors.
Here’s an in depth understanding of the typical statutory audit timeline, key stages involved, legal due dates, and practical tips for ensuring a smooth audit process.
Overview of a Statutory Audit?
A Statutory audit is an independent examination of the financial statements of a company, required under law (e.g., Companies Act 2013 in India). The objective is to determine whether the financial records are accurate and fairly present the company’s financial position.
For Indian companies, it is conducted by a Chartered Accountant or a firm of CAs appointed by the company’s Board or shareholders.
Why the Audit Timeline Matters
Missing the statutory audit deadline can lead to:
- Penalties under the Companies Act
- Delays in tax return filings
- Impacts on investor confidence
- Challenges in securing loans or funding
- Audit qualifications or adverse remarks
More importantly, rushed audits tend to result in errors, missed issues, and friction between auditors and management. That’s why early planning and disciplined execution are essential.
Statutory Audit Deadline in India
Listed Entities
- Quarterly – 45 days from the end of the quarter. (Limited Review)
- Annual – 60 days from the end of the financial year.
Under the Companies Act, 2013, every company (except One Person Companies) must:
- Hold its Annual General Meeting (AGM) within 6 months of the financial year end (i.e., by 30th September for companies with March year-end).
- The audited financial statements must be approved by the Board and presented to shareholders at the AGM.
That means the statutory audit must be completed before the AGM, ideally by mid-August, to leave room for finalization, board approvals, and printing.
Ideal Timeline for Completing a Statutory Audit
Here’s a recommended audit timeline that helps ensure timely closure without chaos:
Phase 1: Planning and Preparation (April)
Objectives:
- Define the scope and timeline
- Identify key risks and focus areas
- Set deliverables and responsibilities
Activities:
- Auditor sends a list of required documents (client assistance schedule)
- Management prepares audit-related data: trial balance, ledger extracts, fixed asset schedules, etc.
- Internal audit findings are shared, if available
- Management confirms key estimates (provisions, impairments, write-offs)
Why It Matters:
Early planning prevents last-minute surprises. If books are not closed properly, audit fieldwork will drag endlessly.
Phase 2: Interim Audit / Walkthroughs (May)
Objectives:
- Understand internal controls
- Test operational transactions
- Identify material misstatements early
Activities:
- Auditors perform walkthroughs of key processes: revenue, purchases, payroll, etc.
- Test samples of transactions from the first 9–10 months
- Check GST reconciliations, TDS returns, compliance status
- Begin preliminary analytical procedures
Pro Tip:
Interim audits are extremely useful for large companies or complex operations. They reduce the burden during the final audit window.
Phase 3: Finalization of Books (June)
Objectives:
- Finalize accounts and closing entries
- Ensure all balances are reconciled
- Ensure that books are complete in all aspects before proceeding with finalization.
Activities:
- Management closes books for the financial year
- Performs reconciliations (bank, vendor, GST, TDS, intercompany)
- Provisions and depreciation are booked
- Statutory dues are calculated
Why It Matters:
Audit readiness depends on clean, reconciled accounts. This stage is management’s responsibility and forms the foundation for audit fieldwork.
Phase 4: Audit Fieldwork (July)
Objectives:
- Detailed testing of financial statements
- Validate balances and disclosures
- Draft the auditor’s report
Activities:
- Auditors perform substantive testing: vouching invoices, verifying fixed assets, confirming balances
- Test year-end adjustments, related party transactions, contingent liabilities
- Review board minutes, legal cases, and compliance issues
- Prepare audit working papers and raise queries
Challenges to Avoid:
- Delayed responses to audit queries
- Missing backup documentation
- Lack of access to accounting software
Phase 5: Finalization and Board Approval (Early to Mid-August)
Objectives:
- Finalize audited financials
- Obtain board approval
- Prepare for the AGM
Activities:
- Draft auditor’s report is shared
- Management and auditors agree on final figures
- Audit committee reviews findings (in applicable companies)
- Financial statements are signed and dated
Phase 6: Filing and Reporting (Post-Audit Closure)
Objectives:
- Complete regulatory filings
- Communicate with stakeholders
Activities:
- Upload financials to MCA via Form AOC-4 within 30 days of AGM
- File MGT-7 (Annual Return) within 60 days of AGM
- Submit auditor’s report and board report as part of annual filing
Factors That Can Impact the Audit Timeline
- Readiness of Books of Account:
Incomplete ledgers or delayed year-end adjustments can stall audit work. - Changes in Accounting Policies or Standards:
Adoption of new IND-AS requirements can add time to interpretation and disclosures. - Complex Transactions:
Restructuring, share-based payments, mergers, or international transactions take longer to audit. - Delays in Third-Party Confirmations:
Vendors, customers, banks, or lawyers may delay sending required confirmations. - Disagreements on Judgments or Estimates:
If auditors and management disagree on provisioning or classification, resolution may take time.
Tips for Timely Audit Completion
- Organize Documents: Keep working papers, schedules, and ledgers well-documented and indexed.
- Set Internal Deadlines: Plan to complete everything at least 2 weeks before the legal deadline.
- Maintain Open Communication: Hold weekly check-ins between audit and finance teams during fieldwork.
- Track Queries and Responses: Use shared trackers or audit software to manage outstanding items.
- Train Your Team: Ensure finance staff are aware of audit timelines and deliverables.
Statutory audits are not just about compliance, they are about financial discipline, accuracy, and credibility. Treating the audit as an annual formality is risky; treating it as a critical project with a structured timeline ensures smoother closure and better stakeholder confidence.
The timeline for completing a statutory audit isn’t fixed in stone, but it must align with the company’s year-end, regulatory deadlines, and audit readiness. With smart planning, clear communication, and proactive execution, companies can meet their statutory obligations efficiently and confidently.
