Internal audit – An excellent opportunity for aspiring Professionals
- Blog|News|Company Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 30 July, 2021
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The Companies Act 2013 provides an excellent opportunity to explore a new avenue for professionals like company secretaries and cost accountants, either in employment or in practice in the area of internal audit. Let us look at the relevant provisions of the Companies Act 2013 along with the requirement of Listing Obligations and Disclosure Requirement Regulations of 2015.
The Companies Act 2013 vide its section 138 (1) has a provision stating that such class or classes of companies as may be prescribed shall be required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the board to conduct an internal audit of the functions and activities of the company.
The relevant section is reproduced from the Companies Act 2013 for ready reference.
1.1 Section 138(1) of Companies Act 2013 – “Such class or classes of companies as may be prescribed shall be required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the board to conduct an internal audit of the functions and activities of the company.”
Companies covered under internal audit
2. According to Rule 13 of The Companies (Accounts) Rules, 2014 following class or classes of companies shall be required to appoint an internal auditor or firm of internal auditors, namely:
a) Every listed company
b) Every unlisted public company having-
(i) Paid-up share capital of 50 crore rupees or more during the preceding financial year; or
(ii) Turnover of 200 crore rupees or more during the preceding financial year; or
(iii) Outstanding loans or borrowings from banks or public financial institutions exceeding 100 crore rupees or more at any point of time during the preceding financial year; or
(iv) Outstanding deposits of 25 crore rupees or more at any point of time during the preceding financial year; and
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