on internal audit

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whacky

whacky (Querist)
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16 November 2007 Is there any section regarding mandation of internal audit by a company

CA. Ramesh P Choudhary

CA. Ramesh P Choudhary (Expert)
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16 November 2007 the Central Government has issued, in consultation with ICAI, a new order u/s.227(4A) called the Companies (Auditor’s Report) Order, 2003. This can be called ‘CARO-2003’ which has come into force from 1st July 2003. There are 33 items in CARO on which the auditor has to make specific comments.

CARO now provides that this reporting requirement about internal audit system will apply to any of the following companies :

(i) Listed company

(ii) Any other company with paid up capital and reserves exceeding Rs.50 lacs as at the commencement of the financial year, or

(iii) Any company having an average turnover exceeding Rs.5 crores for a period of 3 consecutive financial years immediately preceding the relevant financial year.