Types of Audits Every Indian Company Needs in 2026: Statutory, Internal, Tax & More

TL;DR Summary A statutory audit is mandatory for every registered company in India under the Companies Act 2013 – regardless of size or turnover – with additional audits required based on specific thresholds: tax audit under Section 44AB for turnover above ₹1 crore, internal audit for qualifying companies, and secretarial audit for listed and large public companies. Non-compliance carries serious consequences, including monetary penalties, director disqualification, legal action, and difficulty securing loans or investments – while FY 2025-26 reforms have added mandatory audit trails, stricter fraud reporting, and data analytics-driven scrutiny. A statutory audit typically takes 3-8 weeks depending on company size and documentation readiness, and choosing the right CA firm with Indian regulatory expertise, modern tools, and clear communication makes the difference between compliance as a burden and compliance as a business advantage.

Yes, an audit is mandatory for all companies registered in India under the Companies Act 2013, regardless of size, turnover, or profit – every private limited, public limited, and one-person company must appoint a statutory auditor and undergo an annual audit. Beyond the statutory audit, companies may also require a tax audit under Section 44AB of the Income Tax Act if turnover crosses prescribed limits, an internal audit based on company size thresholds, a GST reconciliation audit, and a secretarial audit for listed or large public companies. Non-compliance attracts fines, director disqualification, and legal consequences under Section 147 of the Companies Act. The audit process follows five structured steps – scope definition, planning, data gathering, reporting, and follow-up – typically completed within 3-8 weeks depending on company size and document readiness.

Running a company in India comes with several compliance requirements, and an audit is one of the most important among them. Audits help businesses ensure that their financial records are correct, compliant, and reliable.

In simple terms, an audit gives confidence to owners, investors, banks, and regulators that the company’s financial statements are accurate.

Mandatory Audit Types at a Glance

Audit Type	Applicable To	Frequency	Governing Act
Statutory Audit	All companies (Pvt Ltd, Public, OPC)	Annual	Companies Act, 2013 (Sec. 139–147)
Tax Audit	Businesses crossing turnover limits under Sec. 44AB	Annual	Income Tax Act, 1961
Internal Audit	Companies crossing Section 138 thresholds; all listed companies	Periodic (as set by audit committee)	Companies Act, 2013 (Sec. 138)
Secretarial Audit	Listed companies; large public companies; high-borrowing private companies	Annual	Companies Act, 2013 (Sec. 204)
Cost Audit	Specified industries crossing notified turnover limits	Annual	Companies Act, 2013 (Sec. 148)
LLP Audit	LLPs crossing turnover/contribution limits	Annual	LLP Act, 2008 (Rule 24, LLP Rules 2009)

Indian companies must undergo a statutory audit annually, regardless of size or turnover. Internal audit becomes mandatory once a company crosses the thresholds laid down under Section 138 of the Companies Act, 2013. Beyond these two, a tax audit, secretarial audit, or cost audit may also apply depending on turnover, listing status, and industry.

Running a company in India means more than one audit can land on your desk in a year, and it is easy to lose track of which one applies to you. This guide covers the main audits every Indian company should know about for 2026, what triggers each one, how the requirement differs across a Private Limited Company, an LLP, and a Listed Company, and what happens if any of them get missed. Where it helps, we have linked to a more detailed page on that specific audit.

What Audits Are Mandatory for Indian Companies?

The starting point is simple: every company registered in India, private or public, large or small, must get a statutory audit done every year under the Companies Act, 2013. There is no turnover exemption here, not even for a company that made no money during the year.

From there, things get specific to the business. A tax audit kicks in once turnover crosses the limit set under Section 44AB of the Income Tax Act. An internal audit becomes compulsory only if the company crosses certain size thresholds under Section 138. A secretarial audit applies mainly to listed companies and larger public companies, though some private companies get pulled in too if their borrowings are high enough. A cost audit is narrower still, applying only to companies in specific industries notified by the government, once turnover in that industry crosses a set limit.

LLPs sit slightly outside this framework, since they are governed by the LLP Act rather than the Companies Act, and follow their own audit threshold.

Types of Audits: Statutory, Internal, Tax, Secretarial, Cost

Statutory Audit

This is the audit every company must go through, year after year, under Sections 139 to 147 of the Companies Act, 2013. A practising Chartered Accountant examines the books and gives an opinion on whether the financial statements show a true and fair view. It applies whether the company is profitable, loss-making, dormant, or brand new. You can read more on our statutory audit page, where we walk through how PKC handles the process end to end.

Internal Audit

Internal audit looks inward, at how well the company’s processes, controls, and risk management actually work, rather than just checking the numbers. Under Section 138 of the Companies Act, read with Rule 13 of the Companies (Accounts) Rules, 2014, it is mandatory for all listed companies, and for unlisted public or private companies that cross specific turnover, capital, loan, or deposit thresholds (see below). Many companies below the threshold run one anyway, since it tends to catch problems before they show up in the statutory audit. Our internal audit page covers how this works in practice.

Tax Audit

Governed by Section 44AB of the Income Tax Act, 1961, a tax audit checks whether income, expenses, and tax positions have been reported correctly. For most companies, this is triggered once turnover crosses Rs. 1 crore, or Rs. 10 crore where cash transactions stay within 5% of both receipts and payments. The report is filed using Form 3CA along with Form 3CD, since companies are already audited under the Companies Act. Our tax advisory team can walk you through whether this applies to you this year.

Secretarial Audit

This one checks legal and governance compliance rather than financial accuracy — things like proper maintenance of statutory registers, timely filing of forms, and adherence to SEBI and other regulations. It is conducted by a Practising Company Secretary and reported in Form MR-3. Every listed company needs one, along with public companies crossing certain capital or turnover limits, and any company, public or private, with high enough borrowings from banks or financial institutions.

Cost Audit

Cost audit is the narrowest of the lot. It applies only to companies operating in specific industries listed by the government under the Companies (Cost Records and Audit) Rules, 2014 — such as pharmaceuticals, fertilizers, sugar, telecom, and a set of other regulated and non-regulated sectors — once turnover from that particular product or service crosses the prescribed limit. A Cost Accountant carries out this audit. Given how industry-specific this gets, it is worth checking applicability with your CA rather than assuming it does or does not apply.

Audit Requirements by Company Type (Pvt Ltd / LLP / Listed)

This is usually where things get confusing, since the same audit means different things depending on the entity.

Company Type	Statutory Audit	Internal Audit	Secretarial Audit
Private Limited Company	Mandatory, regardless of turnover	Only if turnover ≥ Rs. 200 crore or borrowings from banks/FIs > Rs. 100 crore	Generally not applicable, unless borrowings cross Rs. 100 crore
One Person Company (OPC)	Mandatory, regardless of turnover	Rarely triggered given typical OPC turnover	Not applicable in practice
LLP	Only if turnover > Rs. 40 lakh or contribution > Rs. 25 lakh (governed by LLP Act, not Companies Act)	Not applicable	Not applicable
Unlisted Public Company	Mandatory	If paid-up capital ≥ Rs. 50 crore, turnover ≥ Rs. 200 crore, borrowings > Rs. 100 crore, or deposits ≥ Rs. 25 crore	If paid-up capital ≥ Rs. 50 crore, turnover ≥ Rs. 250 crore, or borrowings ≥ Rs. 100 crore
Listed Company	Mandatory + quarterly review under SEBI LODR	Always mandatory	Always mandatory + Annual Secretarial Compliance Report

A Private Limited Company always needs a statutory audit, no matter how small. Internal audit only becomes mandatory once turnover crosses Rs. 200 crore, or borrowings from banks or financial institutions exceed Rs. 100 crore, in the preceding financial year. Secretarial audit usually does not apply to private companies, unless those same high borrowings push it into scope.

An LLP works differently altogether, since the Companies Act does not govern it. Under Rule 24 of the LLP Rules, 2009, an LLP only needs its accounts audited once annual turnover exceeds Rs. 40 lakh, or partner contribution exceeds Rs. 25 lakh. Below that, audit is optional. LLPs providing professional services are sometimes required to get audited regardless of these limits, so it is worth double-checking if that applies to you.

A Listed Company has the fullest set of obligations. Statutory audit, internal audit, and secretarial audit are all mandatory regardless of size, and SEBI’s listing regulations add quarterly financial reviews and an Annual Secretarial Compliance Report on top of the annual ones.

An Unlisted Public Company sits in between. Statutory audit always applies. Internal audit becomes mandatory if paid-up capital reaches Rs. 50 crore, turnover reaches Rs. 200 crore, outstanding loans exceed Rs. 100 crore, or deposits reach Rs. 25 crore. Secretarial audit kicks in at a paid-up capital of Rs. 50 crore or turnover of Rs. 250 crore, or again if borrowings cross Rs. 100 crore.

Penalties for Missing Mandatory Audits

Skipping a mandatory audit is not a small risk. Under Section 147 of the Companies Act, a company that fails to get its statutory audit done can be fined between Rs. 25,000 and Rs. 5 lakh, and the auditor faces a similar range, or four times their fee, whichever is lower. Where fraud or deliberate misstatement is involved, the fine for the auditor rises sharply, up to Rs. 25 lakh, and the matter can move into criminal territory under Section 447.

There are knock-on effects too. A company that has not filed audited financial statements cannot update records with the Registrar, open new bank accounts easily, or raise funding, and gets marked as non-compliant on the MCA portal. Directors can face disqualification under Section 164 if the default continues for too long.

For internal audit, since there is no specific penalty section under Section 138 itself, the general penalty under Section 450 applies — an initial fine of up to Rs. 10,000, plus Rs. 1,000 for every additional day the default continues. Secretarial audit non-compliance can attract a penalty of up to Rs. 2 lakh each for the company, the officer in default, and the company secretary involved, under Section 204(4).

How to Choose the Right Audit Partner

Picking an audit firm is not just about ticking a compliance box. A few things genuinely make a difference:

Look for a firm that understands your industry, not just audit standards in general. A manufacturing company needs different questions answered than a SaaS startup does.

Check how they communicate during the audit. One that drags on for months because queries go unanswered is usually a process problem, not a complexity problem.

Ask what they do beyond signing the report. A good partner flags weak controls or compliance gaps you did not know existed, rather than handing over a clean opinion and moving on.

Confirm independence early. The same firm cannot be your statutory auditor and your internal auditor at once, so if you need both, plan for two separate engagements.

At PKC Management Consulting, we work across statutory, internal, and tax audits for companies of different sizes, and we are upfront about what applies to your business and what does not, rather than recommending services you do not need.

Keeping every audit deadline straight across a financial year is genuinely hard, especially once your company crosses two or three thresholds at once. We have put together a simple Company Audit Compliance Calendar that lists out when each audit typically needs to start, when reports are due, and which form goes where. You can download it from our Downloads page and keep it pinned somewhere your finance team will actually see it.

Frequently Asked Questions

What audits are mandatory in India?

Every company must undergo a statutory audit annually under the Companies Act, 2013. Beyond that, a tax audit, internal audit, secretarial audit, or cost audit may apply depending on turnover, borrowings, listing status, and industry.

Is statutory audit compulsory for all companies?

Yes. Every company registered in India, private or public, must appoint a statutory auditor and get its accounts audited each year, regardless of turnover or profit.

What is the difference between statutory and internal audit?

A statutory audit, required for every company, checks whether financial statements present a true and fair view, and is conducted by an external Chartered Accountant. An internal audit, mandatory only for companies above certain size thresholds, looks at internal controls, processes, and risk management, and can be conducted by an in-house or outsourced team.

Is internal audit mandatory for private companies?

Only if the private company’s turnover crosses Rs. 200 crore, or its borrowings from banks or financial institutions exceed Rs. 100 crore, in the preceding financial year.

Does an LLP need a statutory audit like a company?

No. LLPs follow their own rule under the LLP Act. An LLP needs its accounts audited only if turnover exceeds Rs. 40 lakh or partner contribution exceeds Rs. 25 lakh in a financial year.