Quick answer
What is a statutory audit and who needs one?
A statutory audit is the annual audit of financial statements required by law. Every company registered under the Companies Act, including private limited companies and OPCs, must have its accounts audited each year, whatever its turnover. Only a practising chartered accountant or CA firm can be appointed as the statutory auditor and sign the report.
- Required every year for every company, even with zero turnover
- Auditor must be a practising chartered accountant or CA firm
- Auditor appointment is reported to the ROC in form ADT-1
- Audited accounts feed AOC-4, MGT-7 and the company ITR
What is a statutory audit?
A statutory audit is an examination of a company's books, records and financial statements by an independent auditor, followed by a report on whether those statements give a true and fair view. The word statutory simply means the law makes it compulsory; the owners cannot opt out.
The auditor tests sales, purchases, expenses, bank balances, loans, fixed assets, stock and statutory dues such as GST and TDS. The output is the audit report attached to the balance sheet and profit and loss account. Shareholders adopt these audited accounts, and the company then files them with the Registrar of Companies.
An audit is not the same as bookkeeping. Your accountant prepares the books; the auditor checks them. A firm that writes your accounts should not then audit the same numbers, which is one reason companies usually keep the two roles apart. If your books are behind, get them closed first through accounting and bookkeeping support before the auditor starts.
Which businesses in Delhi need a statutory audit?
Every company incorporated under the Companies Act needs a statutory audit every financial year, regardless of size, profit or turnover. Other business forms follow their own laws, so a proprietorship or partnership firm does not need a company audit but may still fall under the income tax audit.
Founders of a new private limited company are often surprised that a company with almost no transactions in its first year still needs audited accounts. The rule is about the legal form, not activity.
| Business type | Statutory audit under company law? | What to check |
|---|---|---|
| Private limited company | Yes, every year | Appoint the first auditor soon after incorporation |
| One person company (OPC) | Yes, every year | Same audit duty as any other company |
| Public limited company | Yes, every year | Further rules apply to listed companies |
| Section 8 company | Yes, every year | Audit applies even though it is a non-profit |
| LLP | Under the LLP Act, not the Companies Act | Audit depends on the LLP rules on turnover and contribution; confirm the current limits with a CA |
| Partnership firm or proprietorship | No company audit | Check whether a tax audit applies to you |
General position under Indian company law. LLP limits are not quoted here; confirm current rules with a practising CA or the MCA portal.
Need help with statutory audit? Talk to a chartered accountant in Delhi today. First call is free.
How is a statutory auditor appointed?
The board appoints the first statutory auditor of a new company, and later auditors are appointed by the shareholders at the annual general meeting for a multi-year term. The company then reports the appointment to the ROC in form ADT-1 on the MCA portal.
The auditor must give written consent and confirm eligibility before the appointment. Indian company law limits who can act as an auditor: for example, a person with a close business or financial link to the company, or one who is its employee, cannot audit it. The auditor's certificate on eligibility is part of the paperwork.
- 1
Shortlist practising CAs
Pick two or three CA firms and verify each one on ICAI's CA Connect portal before you ask for proposals.
- 2
Get consent and eligibility certificate
The chosen auditor gives written consent and confirms in writing that they are eligible and not disqualified.
- 3
Pass the board or shareholder resolution
The board appoints the first auditor; after that the members appoint the auditor at the AGM.
- 4
Inform the auditor
The company sends a formal appointment letter so the auditor knows the term and scope.
- 5
File ADT-1 with ROC Delhi
Report the appointment on the MCA portal in form ADT-1 within the time allowed under the MCA rules.
What documents should you prepare for a statutory audit?
Keep closed books, bank statements, statutory returns and the main registers ready before the auditor's team arrives. A complete file cuts the audit time and the number of queries, and it lowers the chance of a qualified report.
| Area | What the auditor usually asks for |
|---|---|
| Books of account | Trial balance, ledgers, journal entries and the final draft of accounts for the year |
| Bank and cash | Bank statements for every account, bank reconciliations, cash book and cash count |
| Sales and purchases | Invoice registers, credit notes, e-way bills where used, and major contracts |
| GST and TDS | GST returns filed for the year, TDS returns, challans and any notices received |
| Fixed assets | Fixed asset register, purchase bills, depreciation working |
| Stock | Closing stock list, valuation method and physical count records |
| Loans and borrowings | Loan agreements, lender statements, director and related party loans |
| Company records | Board and general meeting minutes, statutory registers, share capital records |
| Payroll | Salary register, PF and ESI challans and returns |
A typical list; your auditor may ask for more depending on the business.
What is the statutory audit timeline for FY 2025-26?
The audit sits between closing the books after 31 March and the AGM, and the audited accounts then drive the ROC filings and the company's income tax return. For FY 2025-26 (AY 2026-27), the return due date for audit cases is 21 November 2026 under CBDT Circular 07/2026.
Work back from those dates. Many Delhi companies lose time because the books are closed late, which squeezes the auditor into a few weeks before the AGM. Plan to hand over a clean trial balance well ahead of the board meeting that approves the accounts. For the full calendar of company filings see our ROC compliance page.
| Step | When | Source |
|---|---|---|
| Financial year ends | 31 March 2026 | Companies Act |
| Books closed and audit carried out | After year end, before the board approves the accounts | Company plan |
| AOC-4 (financial statements) to ROC | Within 30 days of the AGM | MCA compliance calendar (secondary source) |
| MGT-7 (annual return) to ROC | Within 60 days of the AGM | MCA compliance calendar (secondary source) |
| Tax audit report, if the company needs one | 21 October 2026 | CBDT Circular 07/2026 |
| Income tax return for audit cases | 21 November 2026 | CBDT Circular 07/2026 |
Income tax dates: CBDT Circular 07/2026. ROC form timings from secondary compliance calendars; confirm on the MCA portal. Checked October 2026.
What happens if the statutory audit is delayed?
A late audit pushes back the AGM and the ROC filings, and late ROC forms attract additional fees for each day of delay. Secondary compliance sources cite about ₹100 per day per form for AOC-4 and MGT-7; check the current figure on the MCA portal before relying on it.
The knock-on effects are often worse than the fee. Banks and investors ask for audited accounts, tenders often require the last two or three years, and the company's own income tax return for an audit case cannot be filed properly until the accounts are signed. Continued defaults in annual filing can also create problems for the directors under company law. If a company has fallen behind, the sensible order is: close the books, complete the audit, hold the meeting, then clear the pending forms with the late fee.
How do you choose a statutory auditor in Delhi?
Choose a practising chartered accountant whose membership and firm you have verified on ICAI's CA Connect, who has audited businesses like yours, and who is independent of the people keeping your books. Ask about team size, timelines and how queries are handled before you appoint.
- Verify first. Search the CA or firm on CA Connect and check that they hold a certificate of practice.
- Sector experience. A trading company, a Wazirpur manufacturer and a software start-up raise different audit issues, from stock to revenue recognition.
- Independence. Do not appoint the person who writes your books or who has a financial interest in the company.
- Capacity. Ask who will actually do the fieldwork and how many audits the firm signs in the same season.
- Written scope and timeline. Agree the deliverables and dates in the engagement letter.
- UDIN on the report. ICAI requires members to generate a Unique Document Identification Number for documents they attest, so check that the audit report carries one.
Our longer guide on how to choose a chartered accountant has a full checklist and the questions to ask.
Statutory audit vs tax audit vs internal audit: what is the difference?
A statutory audit is required by company law and covers the full financial statements; a tax audit is required by income tax law for certain taxpayers and reports tax particulars; an internal audit is a management check that a company chooses or is required to run on its own processes.
| Point | Statutory audit | Tax audit | Internal audit |
|---|---|---|---|
| Law behind it | Companies Act | Income-tax Act (section 44AB of the 1961 Act) | Company policy, and company law for some larger companies |
| Who it applies to | Every company | Businesses and professionals above the tax audit limits | Decided by management or by law for certain companies |
| Who can do it | Practising CA only | Practising CA only | Can be an internal team or an outside firm |
| Main output | Audit report on the financial statements | Tax audit report filed on the income tax portal | Internal report to management |
| Key date in 2026 | Before the AGM and ROC filings | 21 October 2026 for AY 2026-27 | As set by management |
A company can need both a statutory audit and a tax audit in the same year. Tax audit date: CBDT Circular 07/2026.
How does CA in Delhi help with a statutory audit?
Statutory audit is work reserved for practising chartered accountants, and ICAI's Code of Ethics 2026 does not allow CA firms to be listed on aggregators for reserved services. So we do not assign audits, quote audit fees or accept audit work through this site.
What we do is help you get ready and find the right people. You can browse our directory of chartered accountant firms in Delhi, verify any auditor on ICAI's CA Connect, and use the listed firms for the non-audit work around an audit, such as accounting clean-up, GST reconciliation and ROC filings. If your company is near Wazirpur or the other industrial pockets of North West Delhi, our CA in Wazirpur page covers the local picture.
The audit itself must be carried out and signed by a practising chartered accountant of your choice. This page is general information, not professional advice.
Frequently asked questions
Is statutory audit compulsory for a private limited company with no turnover?
Yes. The audit duty under the Companies Act depends on being a company, not on how much business it did. A private limited company with nil sales still needs its accounts audited, adopted at the AGM and filed with the ROC. A dormant year usually means a shorter audit, but it cannot be skipped.
Who can be appointed as a statutory auditor?
Only a chartered accountant in practice, or a firm of chartered accountants, can be appointed. The person must hold a certificate of practice from ICAI and must not be disqualified, for example because of an employment link or a financial interest in the company. You can confirm membership on ICAI's CA Connect portal.
What is form ADT-1?
ADT-1 is the MCA form a company files to tell the Registrar of Companies that it has appointed a statutory auditor. It is filed online on the MCA portal after the board or shareholder resolution. Your auditor's consent and eligibility letter are kept on record with it.
When should a new company appoint its first auditor?
Soon after incorporation. The board of directors appoints the first auditor, and the company law sets a time limit for doing so after the company is registered. Many founders forget this step during the setup rush, so put it on your post-incorporation checklist alongside the bank account and the opening of books.
Does an LLP need a statutory audit?
An LLP is governed by the LLP Act, not the Companies Act, and its accounts need an audit only when the LLP crosses the turnover or contribution limits in the LLP rules. Small LLPs below those limits are generally exempt. We do not quote the limits here; confirm the current figures with a practising CA before the year end.
Can my accountant also be my statutory auditor?
It is not a good idea and may breach the independence rules. The auditor's job is to check the accounts, so the person who prepared them should not sign the audit report. Keep bookkeeping and audit with separate people or firms, and ask any proposed auditor to confirm independence in writing.
How long does a statutory audit take?
For a small company with clean, closed books, fieldwork can be short. For a larger trading or manufacturing company with stock, loans and many bank accounts it takes longer. The biggest variable is how ready your books are, so close and reconcile them before the audit team starts.
What is a qualified audit report?
A qualified report means the auditor agrees with the accounts except for specific matters, such as missing stock records or an unreconciled balance, which are explained in the report. Banks and investors read qualifications closely, so fixing record gaps before the audit is worth the effort.
Do I need a statutory audit and a tax audit in the same year?
Possibly. Every company needs a statutory audit. A tax audit is a separate requirement under income tax law based on turnover and other conditions. When both apply, the tax auditor usually relies on the audited accounts, and the tax audit report for AY 2026-27 is due by 21 October 2026.
Does CA in Delhi carry out statutory audits?
No. Under ICAI's ethics rules, audit is reserved work that cannot be routed through an aggregator listing, so we only give information on this page. Choose a practising CA yourself, verify them on CA Connect and agree the scope directly with them.