What is the limit by law in respect of mandatory Internal audit.

Question

Accepted Answer

The limit by law in respect of mandatory Internal audit varies depending on the size and nature of the business.

The Companies Act, 2013 in India mandates internal audit for certain classes of companies.
For listed companies, the limit is set at a turnover of Rs. 50 crores or more in a financial year.
For unlisted companies, the limit is set at a turnover of Rs. 200 crores or more in a financial year.
Certain industries like banking, insurance, etc., have their own specific requirements for mandatory internal audit.
The limit may also vary based on the number of employees or the nature of the business.

Accepted Answer

According to section 138 of Companies Act,2013,internal audit is applicable to the following companies:

1.All listed companies

2.All unlisted public companies which satisfies any one of the conditions mentioned below-

a.Deposits accepted is 25 Lakhs or more at any point of time in the financial year.

b.Paid up share capital of the company is 50 Lakhs or more at any time in the financial year.

c.Loans taken from banks or financial institution is 100 lakhs or more during any time in the financial year.

d.Turnover of the company is 200 lakhs or more at any time in the financial year.

3. Private companies whose loans taken is 100 lakhs or more or turnover is 200 lakhs or more.

Top T R Chadha & Co Llp CA Article Assistant interview questions & answers