14 July 2009
What is the nut shell position for internal audit for companies i.e. when co. has to appoint internal auditor, is there any monetary limit, whether audit applicable for both pvt & ltd co., weather applicable for all type of co's etc
14 July 2009
Hi, There is no provision in Companies Act 1956 making the Internal Audit Compulsory.However CARO 2003 requires that all companies having Piad up capital in excess of 50 Lakhs or Average Annual Turnover exceeding 5 Crs in three consecutive financial years, to have an Internal Audit System. Again all Listed Companies are covered whether they are below or above the limit. This clause does not talk about Private and Public company separately. However as Such CARO is applicable to only to those Private Companies which are a) having a Net Worth of more than Rs.50 Lakh (paid up capital plus reserves) b) Which have accepted public deposit c) Which have outstanding borrowings of Rs.10 Lakhs or more, from any Bank or Financial Institution d) Whose turnover is in excess of Rs.5 Crores. Thus you can find out the Limits.
CAclubindia
