India’s audit regulations require businesses to comply with various types of audits, governed under different laws. The most common audits are statutory audits, internal audits, secretarial and cost audits under the Companies Act, 2013, and tax audits under Section 44AB of the Income-Tax Act, 1961. Since the commencement of the Goods and Services Tax (GST) law in 2017, businesses and entrepreneurs in India are also required to conduct GST audit each year.
| Type of audit | Scope of audit | Standards to comply | Who conducts the audit? | Who is the report submitted to? |
|---|---|---|---|---|
| Statutory audit | Audit of the financial records and statements of the company | Auditing standards recommended by ICAI | A licensed chartered accountant (CA) ; or A cost accountant; or A professional decided by the Board. | Members |
| Internal audit | Audit of the functions and activities of the company | NA | A CA (excluding the statutory auditor of the company); or A cost accountant; or A professional decided by the Board | Board of Directors |
| Secretarial audit | – Reporting on the compliance of five laws as mentioned in Form MR-3 – Reporting on the compliance of secretarial standards issued by the Institute of Company Secretaries of India – Monitoring and ensuring compliance with general laws, such as labor laws, competition law, environmental laws – Examining and reporting on the specific observations or qualification, reservation or adverse remarks in respect of the board structures/system and processes relating to the audit period | Auditing Standards recommended by the ICSI | A practicing company secretary | Members |
| Cost audit | Audit of the cost records of the company | Cost auditing standards issued by the Institute of Cost and Works Accountants of India | A practicing cost accountant | Board of Directors |
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