Preparing for Audit in India
Published: August 2023This publication offers insights into the different types of audits in India, role of auditors, and the relevant reporting requirements for companies for audit compliance and documentation preparedness. Besides offering practical advice and providing regulatory updates in the legal and tax realms, we discuss the new audit functions enabled by technology.
Understanding the significance of the various types of audits a company must undertake is crucial for maintaining the financial position and credibility of its business. Whether conducted internally or by a third party, per compliance and statutory requirements, audits allow senior management and shareholders to evaluate a company's performance, establish risk exposure and mitigate vulnerabilities, identify errors, and ensure compliance with government tax, industry, and regulatory norms.
In India, businesses are required to comply with different types of audits governed under various laws. The most common audits include statutory audits, internal audits, cost audits under the Companies Act, 2013, and tax audits under Section 44AB of the Income-Tax Act, 1961. Additionally, since the implementation of the Goods and Services Tax (GST) law in 2017, businesses and entrepreneurs in India must conduct GST audits annually.
In this issue of India Briefing, we provide readers with an overview of India's audit types and processes, outlining general requirements and materials to be prepared. We highlight the role of the auditor and explain the significance of the different types of audit reports and how they identify company irregularities and errors related to tax compliance and operational scrutiny.
We also cover recent developments highlighting how tax and regulatory authorities are streamlining audit requirements on one hand, while tightening scrutiny of audit and accounting professionals, on the other. Lastly, we introduce technology-enabled changes in audit compliance and the recent requirement to enable the audit trail function in business software.
At Dezan Shira & Associates, we have a dedicated team of accounting and legal professionals in India with extensive experience in helping foreign enterprises ensure compliance. If you have any questions or require assistance with Annual Statutory Audit, GST Audit, Bookkeeping, Financial Reporting, or other compliance matters, please contact our offices in India or email us at india@dezshira.com. We are here to support your business needs.
Included in this magazine:
- An Introduction to Auditing in India
- Preparing for the GST Audit
- Technology-Enabled Changes in the Audit Compliance Landscape