Audit of the Business

What is auditing?

The audit of a business is defined as a thorough analysis of the financial health of an organization – as mentioned in the annual report by someone independent of the respective organization. In other words, it refers to a more organised and independent scrutiny of the books, accounts, business documents and vouchers of an organization to determine the authenticity and validity of the financial statement of the organization. In addition, the process also aims to ensure an ubiquitous phenomenon in the corporate and the public sector that academics started identifying an “Audit Society”. 

The respective auditor understands the propositions before him/her for analysis, procures evidence, evaluates the same, and generates an opinion on the basis of his analysis which is conveyed in the form of his audit report.

What is the requirement for appointing an auditor?

The decision and authority to appoint the first auditor of the company is vested in the Board. It is the responsibility of the board to appoint the first auditor within one month from the date of the registration of the company. Here, the registration date refers to the date give at the bottom of the certificate of incorporation issued by the registrar. The first auditor appointed by the board shall hold office until the conclusion of the first annual general meeting of the company.

It is mandatory for every company to appoint an individual or firm as an auditor at first annual general meeting (AGM). The auditor will have to hold office from the conclusion of that meeting till the conclusion of the sixth (6th) Annual General Meeting (AGM). The duration of auditor of company will be term of consecutive Five (5) years each for Individual and Two terms of Consecutive Five (5) years in case of Auditor Firm.

When you need an audit?

• If you a service provider such as Doctor, Advocate etc. with turnover of more than 15 lacs per year
• If you own a Private Limited Company
• Other businesses with turnover of greater than 1 Crore

What is the due date of audit & income tax return filling?

• FOR CORPORATE ASSESSEES, (Like Private Limited & Public Limited Companies) and for all other corporate assesses, the due date for furnishing his return of income is 30th September of the Assessment Year.
• FOR NON CORPORATE ASSESSEES, (Like Partnership Firm & Proprietorship Firm) who is required to obtain Tax Audit Report (TAR) under section 44AB of the Act and for all other corporate assessees, the due date for furnishing his return of income is 30th September of the Assessment Year.

FOR ANY OTHER ASSESSEES Like Salaried Income, Person having Income from House property, Interest income, Business Income where accounts are not required to be audited the due date for furnishing his return of income is 31st July of the Assessment Year. If your total income like salary, rent received, interest on deposit etc exceeds taxable limit of Rs2.5 lacs, you have to submit Income Tax return in the prescribed form ITR 1 ITR 2 ITR 3…. Depending on the nature of income. Even if your taxable income is less than as prescribed every year, but you have to claim refund for the TDS collected from you, you have to submit the Tax Return.​