Question 1

When is a statutory audit mandatory for a company in India?

Accepted Answer

Every company incorporated under the Companies Act 2013 — private or public, regardless of turnover — must have its financial statements audited annually by a Chartered Accountant. The threshold-based exemptions apply to tax audit and LLP audit, not to company statutory audit.

Question 2

What is the turnover threshold for a tax audit under section 44AB?

Accepted Answer

A tax audit is generally required where business turnover exceeds ₹1 crore (raised to ₹10 crore where cash receipts and payments are each within 5% of the total), or where professional gross receipts exceed ₹50 lakh. Presumptive-scheme assessees declaring below the prescribed profit also trigger it.

Question 3

What is the difference between Form 3CA and Form 3CB?

Accepted Answer

Form 3CA is used when the accounts are already audited under another law (e.g. the Companies Act); Form 3CB is used when no such audit is required and the CA conducts the audit solely under the Income-tax Act. Both are accompanied by the detailed particulars in Form 3CD.

Question 4

Who needs an Internal Financial Controls (IFC) audit?

Accepted Answer

Listed companies and certain prescribed classes must have the auditor report on the adequacy and operating effectiveness of internal financial controls over financial reporting. Many unlisted companies adopt IFC frameworks voluntarily for governance and investor confidence.

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