Statutory Audit in India 2026

Every company incorporated under the Companies Act 2013 in India is legally required to have its financial statements audited by a practising Chartered Accountant, without exception. Section 139 of the Act mandates this from your first year of operations, and non-compliance attracts penalties under Section 147, fines ranging from ₹25,000 to ₹5,00,000, with additional daily defaults for continued contravention. TheMCA21 portal makes the appointment of your auditor official through Form ADT-1, but the real work begins when your auditor sits with your books and certifies whether your financial statements present a true and fair view under the Companies (Indian Accounting Standards) Rules, 2015 or the old AS framework, depending on your class. Statutory audit is not a filing you can paper-over, your auditors' report is attached to every Annual Return (Form MGT-7) and financial statement (Form AOC-4) you file on the MCA portal. Lenders, foreign investors, and PE funds read it before any term sheet. In 2026, with enhanced scrutiny from the MCA under the Active tag norms and increased CBDT focus on transfer pricing documentation, the quality of your statutory audit has consequences beyond compliance alone. KAMRIT Financial Services LLP connects you with practising CAs who execute the full audit lifecycle, from appointment resolution and Form ADT-1 filing to the signed audit report and director certifications, end to end.

What is Statutory Audit in India 2026?

A statutory audit is a mandatory examination of a company's financial records and statements by an independent Chartered Accountant, conducted to verify accuracy and compliance with Indian statutes. The primary governing law is the Companies Act 2013, specifically Sections 139 to 148, read with the Companies (Audit and Auditors) Rules 2014. For companies that also cross the ₹2 crore turnover threshold, a concurrent tax audit under Section 44AB of the Income Tax Act 1961 is triggered, technically a separate engagement but often conducted alongside the statutory audit by the same firm. For companies with export earnings, transfer pricing provisions under Sections 92 to 92F of the Income Tax Act add further documentation requirements that feed directly into the audit file. The owner of the regulatory framework is the Ministry of Corporate Affairs (MCA), with the auditor's appointment governed by a shareholders' resolution filed as Form ADT-1 on the MCA21 portal. The actual audit is conducted in accordance with the Standards on Auditing (SA) issued by the Institute of Chartered Accountants of India (ICAI). Banks and NBFCs fall under additional oversight from the RBI, insurance companies under IRDAI, and listed entities under SEBI (LODR) Regulations 2015, each adding sector-specific audit requirements layered on top of the Companies Act baseline. The audit report, once signed, becomes a public document filed with the MCA and is accessible via the MCA portal to any party conducting due diligence.

Who needs this

A company is eligible for and legally obligated to undergo a statutory audit if it meets any of the following thresholds or characteristics under Indian law.

• Every company incorporated under the Companies Act 2013, regardless of paid-up capital or turnover, from the date of its first AGM, this is the absolute baseline eligibility trigger under Section 139(1).
• Companies with paid-up capital of ₹50 lakh or above are automatically captured under mandatory audit, with Form ADT-1 appointment required within 15 days of the AGM at which the auditor is appointed.
• Companies with turnover exceeding ₹2 crore in any financial year are subject to concurrent tax audit under Section 44AB of the Income Tax Act 1961 in addition to the statutory audit.
• All listed companies are required to have a statutory audit regardless of size, with additional obligations under SEBI (LODR) Regulation 31 and audit committee requirements under Regulation 18.
• Banking companies and Non-Banking Financial Companies (NBFCs) registered under the RBI Act 1934 are subject to statutory audit under the Banking Regulation Act 1949 and RBI supervisory directions respectively.
• Insurance companies regulated under the IRDAI Act 1999 require audit additionally compliant with IRDAI (Accounts) Regulations 2016.
• LLPs with turnover above ₹40 lakh or contribution above ₹25 lakh are eligible for mandatory audit under Section 26 of the LLP Act 2008 and the Limited Liability Partnership (Amendment) Rules 2024.
• Foreign companies operating in India as branch offices or project offices under FEMA regulations are subject to audit of their Indian books under the Companies Act Schedule III.
• Companies receiving government grants or those with public deposits under the Companies (Acceptance of Deposits) Rules 2014 are additionally subject to audit scope expansion under the relevant rules.

Documents required

The document stack for a statutory audit varies based on your entity type, turnover, and whether you have related-party transactions or foreign earnings. The following applies to a typical private limited company in 2025-26.

• Annual Financial Statements (Balance Sheet, Profit and Loss Account, Cash Flow Statement) prepared under Schedule III of the Companies Act 2013 or Ind AS for eligible companies.
• Trial Balance for the full financial year with month-wise grouping of all ledger accounts.
• Bank Statements for all current accounts, savings accounts, FDRs, and credit card accounts for all 12 months, banks will be asked to confirm directly.
• Form 16A, Form 16B, and Form 16C TDS certificates for contractors, rent recipients, and other deductees.
• Invoice register covering both GST-output and GST-input with GSTIN-level segregation for companies registered under CGST Act 2017.
• Copies of all Form 26AS TDS certificates downloaded from the TRACES portal before the audit commencement.
• Fixed Asset Register with gross block, accumulated depreciation, additions, and disposals for the year.
• Board meeting minutes book, relevant resolutions for related-party transactions, loans to directors, and auditor appointment.
• Form ADT-1 copy filed with MCA confirming the appointment of the auditor at the AGM.
• MOA, AOA, and all incorporation documents including ROC filings (for first-year auditors or new client onboarding).
• GST Returns (GSTR-1 and GSTR-3B) for all 12 months of the financial year with reconciliation to books.
• Acknowledgment copies of all Income Tax Return filings (ITR-V orAcknowledgment) for the preceding three assessment years.

How KAMRIT runs it, step by step

KAMRIT's statutory audit engagement runs through seven structured stages, each with defined inputs, actions, and deliverables mapped to MCA, ICAI, and Income Tax requirements.

1. Engagement Onboarding and Document Checklist. KAMRIT assigns a dedicated relationship manager who sends the client a structured document checklist within 24 hours of engagement confirmation. This checklist is customised based on entity type (private limited, listed, NBFC, LLP), turnover bracket, and GST/TDS registration status. The client must provide all bank statements, the trial balance, and GST return data for the financial year under audit. At this stage KAMRIT also verifies the validity of the existing Form ADT-1 on the MCA portal and checks whether the auditor appointment was done within the legally required 15-day window post-AGM.
2. Auditor Appointment and Form ADT-1 Filing. If the company has not yet appointed an auditor or if the prior auditor's term has concluded, KAMRIT assists the board in passing a resolution and filing Form ADT-1 on the MCA21 portal within the statutory 15-day deadline under Rule 12 of the Companies (Audit and Auditors) Rules 2014. For companies appointing an auditor for the first time, this step is completed within 3 working days of receiving board resolution minutes. The government filing fee for ADT-1 is nominal; KAMRIT includes this in the service fee.
3. Planning and Risk Assessment. The assigned CA firm conducts a risk assessment meeting with the client's finance team, focusing on areas of significant judgement, revenue recognition under AS 9 or Ind AS 115, provisioning for receivables, inventory valuation, and related-party transactions under Section 188 of the Companies Act. For companies with related-party transactions above the prescribed threshold under the Companies (Meetings of Board and its Powers) Rules 2014, the audit scope expands to include prior approval of the audit committee. KAMRIT issues an engagement letter and audit planning memorandum within 5 working days of onboarding completion.
4. Field Audit and Working Papers. The audit team conducts substantive testing on the client's books, verifying sales invoices against delivery challans, cross-checking TDS deductions against Form 26AS, reconciling GST input credits against GSTR-2A, and confirming bank balances through direct bank confirmations. For companies with foreign-related party transactions, transfer pricing documentation under Section 92D is prepared concurrently. Working papers are prepared in accordance with SA 300 and SA 230. This stage typically takes 10 to 15 working days depending on the size of the entity and the completeness of client records at the time of audit commencement.
5. Draft Report and Management Letter. The CA prepares a draft audit report and, where applicable, a management letter identifying internal control weaknesses, compliance gaps (for example, delay in GST return filing or lapses in TDS deposit within due dates), and suggestions for financial reporting improvements. The client is given 3 working days to respond to the management letter and provide any additional documentation. For tax audit cases, Form 3CD under Section 44AB is also drafted and shared for review at this stage.
6. Final Report and Director Certifications. Once the client responds, the CA signs the final audit report and issues it to the company. KAMRIT then assists the directors in preparing the required certifications, including the directors' report under Section 134, the secretarial compliance report for companies above certain thresholds, and the AOC-4 XBRL filing for companies mandated to file in extensible business reporting language format. The completed audit report is ready for attachment to the financial statements filed with the MCA.
7. MCA Filing and Active Tag Confirmation. KAMRIT links the signed audit report to the financial statements in Form AOC-4 and the Annual Return in Form MGT-7, both filed on the MCA21 portal within the due date (typically 30 days from the date of AGM, extendable by 30 more days with additional fee). For companies on the MCA active tag list, KAMRIT also confirms that Active Company Tagging of Trades and Entities (ACT) compliance has been maintained. The final delivery package includes the signed audit report, directors' report, Form AOC-4, Form MGT-7 acknowledgment, and the management letter.

Timeline

The end-to-end statutory audit engagement, from kickoff to MCA filing confirmation, typically spans 35 to 55 working days for a private limited company with turnover below ₹50 crore. KAMRIT-controlled stages, onboarding, document collection, Form ADT-1 filing, field audit, report drafting, and MCA submission, account for approximately 25 to 30 working days. The regulator-controlled portions are limited to the MCA's own processing time for Form AOC-4 and MGT-7 filings, which at current volumes on the MCA21 portal is typically 2 to 5 working days for routine filings, but can extend to 10 to 15 working days during peak filing seasons (September to November). For companies undergoing statutory audit for the first time or transitioning auditors mid-term, add 5 to 7 working days for the resolution-passing and Form ADT-1 re-filing process. Companies with GST annual returns reconciliation or inventory counts may need an additional week. KAMRIT sets an internal deadline 10 working days before the statutory MCA due date to build in buffer for portal delays.

How our pricing compares

KAMRIT Financial Services LLP offers statutory audit services starting at ₹14,899 for companies with turnover up to ₹1 crore, inclusive of Form ADT-1 filing assistance, auditor coordination, and management letter preparation. The fee scales with company size: ₹24,999 to ₹44,999 for turnover between ₹1 crore and ₹10 crore, and ₹55,000 to ₹1,25,000 for companies above ₹10 crore, with further premiums for NBFC and listed entity audits. IndiaFilings prices a similar statutory audit engagement starting at ₹19,999 for small companies and ranges up to ₹59,999 at the ₹10 crore turnover level, with Form ADT-1 filed as a separate line item at ₹499. Vakilsearch charges ₹21,000 to ₹65,000 for the same bracket, with additional charges for XBRL formatting of Form AOC-4. ClearTax and LegalRaasta position in the ₹15,000 to ₹50,000 range but include limited auditor interaction, the CA assigned is often an empanelled partner rather than a dedicated engagement team. KAMRIT's pricing includes the full engagement team (CA + KAMRIT relationship manager), document management coordination, GST reconciliation support during the audit field work, and MCA submission assistance, which IndiaFilings and Vakilsearch typically charge as add-ons at ₹999 to ₹2,500 per form. KAMRIT's price is competitive at the entry level and differentiates at the mid-market by bundling compliance coordination that clients otherwise pay for separately.

Common mistakes KAMRIT avoids

Most companies encounter at least one of the following during their statutory audit process. These are the top mistakes that inflate costs, cause delays, or create compliance exposure.

• Delaying auditor appointment: Section 139(1) requires the first auditor to be appointed within 30 days of incorporation. Missing this window means the board must separately pass a resolution and refile Form ADT-1, incurring additional cost and MCA non-compliance risk.
• Incomplete GST reconciliation: Auditors will cross-check GSTR-3B filed figures against books. Discrepancies between GST-output tax deposited and books revenue trigger queries that delay the report by 5 to 10 working days.
• Failing to file TDS returns before the audit date: Form 26AS showing TDS deducted but not deposited to the government's account is treated as a compliance failure in the management letter and in the tax audit report.
• Not maintaining an fixed asset register: Without an FAR, the auditor cannot verify gross block, accumulated depreciation, or capital work-in-progress, forcing clients to reconstruct records under time pressure.
• Submitting trial balance with one-year-old open items: Receivables over 180 days old with no provisioning and payables without age analysis trigger adverse comments in the audit report that directors must explain to shareholders.
• Filing Form MGT-7 without reconciling with audited financial statements: The AGM date, share capital details, and director details in MGT-7 must exactly match the AOC-4 audited financials. MCA rejects mismatched filings, costing the company late-filing fees.
• Ignoring Related Party Transaction disclosures: Companies with Section 188 transactions, loans to directors, guarantees given, or purchases from promoter entities, must have board approvals on record. Absence of these resolutions in the minutes book is a common qualification in the audit report.
• Skipping tax audit qualification review: For companies above the ₹2 crore turnover threshold, a concurrent tax audit under Section 44AB is mandatory. Many companies treat this as optional when the audit firm does not flag it at engagement stage, resulting in a penal interest notice from the Income Tax department under Section 234E.