Audit and Assurance Overview
Every company, whether large or small, needs to ensure that their organisation is working effectively and within the prescribed norms, especially due to speedy digital transformation, fast-evolving technology, and regulatory complexity. In order to bring this assurance, a strong check over the internal controls and external compliances of the entity is necessary. This is where audit services come into the picture.
Audit is systematic and independent examination of internal controls and books of accounts of an entity in order to verify efficiency of processes and establish faithfulness in financial information. This audit may be internal or external.
This can be an effective strategy for every organization to ensure smooth functioning. While an entity can always appoint an internal person to perform audit, however, true picture can be displayed only when an external person is involved. This is where professional firms like Aplite Advisors come into picture.
Why Audit?
- To ensure that entity is working efficiently and proper controls are in place.
- To ensure the smoothness and transparency over the process of generation of financial information.
- To rule out the possibilities of any fraud and send a strong message of adherence amongst employees at all levels.
- To avoid interference from Governmental and other Public Authorities.
- To instil the trust of shareholders over the management of the company and strengthen the position in the market.
Types of Audits
- Tax Audit under Income Tax Act, 1961
- GST Audits under CGST/ SGST Act, 2017
- Statutory Audit under Companies Act, 2013
- Internal Audit
- Stock Audits
- Audits of Trust and Non-Charitable Entities.
- Forensic Audit
- Peer Review Audits and Certifications for Listed Entities.
- Management Audits.
- Cost Audit
Who is required to comply with Auditing compliances?
1) Statutory Audit
Individuals, HUFs, and firms are not required to conduct audits under The Companies Act, 2013, but LLPs are required to do so if their annual revenue exceeds 40 lakhs or their contribution surpasses 25 lakhs. Further, Private Limited and Public Limited Companies are required to get themselves audited mandatorily under Companies Act, 2013 regardless of turnover and contribution.
2) Tax Audit
The threshold limit for tax audit u/s 44AB has been raised from Rs. 5 crores to Rs. 10 crores under the Finance Act of 2021, subject to certain conditions. This change will go into effect from April 1, 2021 onwards, and will affect the assessment year 2022-23. This kind of audit is conducted under the provisions of Income Tax Act, 1961 and is applicable for all kinds of entities, subject to turnover threshold.
3) Internal Audit
It is mandatory for all public and private listed entities, subject to turnover thresholds. It is a kind of audit conducted to ensure the presence and operating effectiveness of internal controls and checks throughout the organisations. Even if not mandatory, many organisations go for this audit to streamline their processes better.
4) GST Audit
An audit under GST is the process of examining a taxable person’s records, returns, and other documentation. The goal is to ensure that the turnover declared, taxes paid, refunds claimed, and input tax credits claimed are valid, as well as to check compliance with GST regulations. GST Audit is applicable to a taxpayer upon crossing the threshold turnover for the GST Audit.
5) Stock Audit
Physical verification is required at least once a year for any organization to determine the accuracy of stock valuations reported in the Financials. Furthermore, any discrepancy shortages or wastage records are thoroughly investigated in order to improve the inventory management system. More importantly, reporting under CARO demonstrates its importance, therefore it should be audited.
6) Compliance Audit
The purpose of a compliance audit is to determine if the terms of the applicable laws, rules, and regulations, as well as other directives and instructions given by the responsible authority, are being followed. Adherence to the regulations is critical because failure to do so can result in significant fines and a negative impact on the company’s reputation.
7) Fixed Assets Audit.
The tangible assets that are utilized in an organization are known as fixed assets. These fixed assets can be plant or machinery, furniture and fixtures, vehicles etc. It is necessary to verify that proper acquisition, disposition, depreciation computations, and impairment treatments with regard to fixed assets are carried out in accordance with applicable accounting principles.
Why Aplite?
Audit is a crucial process which cannot be just handed over to anybody. A trustworthy entity that can handle all the financial information and maintain confidentiality is what every auditee looks for. Aplite Advisors have been trusted since ages by its clients for faithfulness and dedication. We ensure independence and transparency to utmost standards.
‘Trust us with your processes and we will streamline them for you, better than anybody’
Client satisfaction has been our vision and mission always.
