A statutory audit checklist for Indian companies covers four things: the records the auditor will ask for, the checks under the Companies Act, 2013, the filing timeline and the gaps that delay sign-off. Every company in India needs an annual audit of its financial statements, whatever its turnover or profit.
This guide lays out the checklist in tables for directors, CFOs, finance managers and accountants. It reflects 2026 rules, including the revised small company limits, audit trail reporting and the FY 2025-26 filing relief.
Key Takeaways
- Every company needs a statutory audit. No turnover limit applies.
- Private companies qualify as small companies at up to ₹10 crore paid-up capital and ₹100 crore turnover from 1 December 2025, provided they are not holding or subsidiary companies, Section 8 companies or companies governed by a special Act.
- KPMG’s FY25 review of 93 large companies found modified audit trail reports at 55 of them (59%). SME rates may differ.
- Reconcile bank, debtor and creditor balances before the auditor arrives.
- AOC-4 and MGT-7 filed late carry an additional fee of ₹100 per day per form, with no cap.
- Fix a hard book-closure date, because late closure compresses fieldwork.
What Does a Statutory Audit Checklist Cover Under the Companies Act 2013?
A statutory audit is an independent examination of a company’s financial statements and books of account by a qualified chartered accountant. The auditor’s report states whether the statements give a true and fair view.
A sound statutory audit checklist maps to the Companies Act 2013 audit requirements and the Standards on Auditing issued by ICAI.
Area | What the auditor checks | Usual owner |
Books of accounts | Completeness and accuracy of ledgers | Accounts team |
Financial statements | Schedule III format, notes, ageing schedules | CFO |
Statutory dues | GST, TDS, PF, ESI, income tax | Tax and payroll |
Controls | Design and operation of internal financial controls | Finance head |
Corporate records | Minutes, registers, MCA filings | Company secretary |
Reporting | CARO 2020, audit trail, fraud reporting | Auditor and management |
Who Needs a Statutory Audit?
Every company incorporated in India must have its financial statements audited each year under Sections 139 and 143 of the Companies Act, 2013. This covers private companies, public companies, OPCs and Section 8 companies, regardless of turnover, profit or age. The ₹1 crore and ₹10 crore limits many people quote belong to tax audit under the Income-tax Act, a separate exercise.
When does this checklist not apply?
The audit requirement covers every company, but some checklist items change by company type.
- Section 8 companies and OPCs: CARO 2020 does not apply, so the CARO rows can be set aside.
- First-year companies: there is no prior-year auditor’s report or carried-forward adjustment, and the first auditor is appointed soon after incorporation.
- Foreign-group subsidiaries: group reporting packages and coordination with the group auditor are often added to the timeline.
- Ind AS versus AS reporting: companies on Ind AS carry additional measurement and disclosure work, while others follow the Accounting Standards.
Confirm the exact position for your company with your auditor.
2026 Snapshot: The Numbers Behind the FY 2025-26 Audit Season
Data point | Figure | Source |
Registered companies, May 2026 | 31.45 lakh, with 21.17 lakh active | |
New companies registered in FY26 | 2,47,755 | |
Small company limits from 1 Dec 2025 | ₹10 crore paid-up capital, ₹100 crore turnover (private companies that are not holding or subsidiary companies) | |
Modified audit trail reports, FY25 | 55 of 93 companies (59%) | |
Audit trail reporting years so far | FY 2023-24 onward |
Every one of the 21.17 lakh active companies needs an audit, and most with a 31 March year-end work towards the same 30 September AGM deadline, so early scheduling helps.
Which Statutory Audit Documents Should Your Finance Team Prepare?
Auditors work from evidence, so a statutory audit checklist starts with the document pack. A full set cuts back-and-forth during fieldwork.
Category | Documents to keep ready | Why the auditor asks |
Books of accounts | Trial balance, general ledger, sub-ledgers, journal vouchers | Base for the financial statements |
Bank and debt | Statements, reconciliations, loan agreements, sanction letters, charge records | Audit evidence on balances and covenants |
Revenue and receivables | Sales invoices, contracts, debtor ageing, confirmation list | Revenue recognition and recoverability |
Purchases and payables | Vendor invoices, creditor ageing, micro and small vendor list | Cut-off and MSME dues exposure |
Fixed assets and stock | Asset register, physical verification reports, stock sheets | Existence and valuation |
Payroll and dues | Payroll registers, TDS, GST, PF and ESI returns and challans | Liabilities and compliance |
Corporate records | Board and AGM minutes, statutory registers, MCA filings | Governance and related-party checks |
Systems | User access list, audit trail logs, backup policy | Rule 11(g) reporting |
A Folder Structure That Simplifies Audit Review
Good audit documentation starts on the company side. Tidy inputs help both parties.
- Permanent folder: incorporation papers, agreements, registers, asset title records
- Year folder: trial balance, ledgers, returns, bank statements
- Evidence folder: vouchers and confirmations, arranged by balance sheet line
Documents Most Teams Forget
- Related party list with transaction details
- Written MSME payment agreements
- Prior-year auditor’s report and carried-forward adjustments
- Summary of legal notices and pending litigation
- Draft points for the management representation letter
What Is the Statutory Audit Process, Step by Step?
Finance workload peaks in steps three to five.
Step | What happens | Finance team action |
1. Engagement | Appointment under Section 139, ADT-1 filing, engagement letter | Pass board and AGM resolutions |
2. Planning | Risk assessment, materiality, audit plan | Share budgets, MIS and organisation chart |
3. Controls review | Walkthroughs of key processes | Provide process notes and control matrices |
4. Testing | Sampling, vouching, analytical procedures | Answer queries within agreed days |
5. Confirmations | Bank, debtor, creditor and legal confirmations | Authorise and chase third parties |
6. Review | Draft financial statements and CARO points | Close open items |
7. Reporting | Representation letter and auditor’s report | Directors sign the financial statements |
Subsidiaries of foreign groups face one extra step at the start. Our guide on first auditor appointment for subsidiary companies covers what changes.
What Should a Statutory Audit Checklist Include on Controls and Reporting?
Reporting items under Section 143(3) determine sign-off timelines, so review them early.
Do CARO 2020 and Internal Financial Controls Reporting Apply to You?
Requirement | Exempt categories (confirm with your auditor) |
CARO 2020 | OPCs, Section 8 companies, small companies that are not holding or subsidiary companies, and certain small private companies with capital and reserves up to ₹1 crore, borrowings up to ₹1 crore and revenue up to ₹10 crore |
Internal financial controls reporting, Section 143(3)(i) | OPCs, small companies, and private companies with turnover below ₹50 crore and borrowings below ₹25 crore, subject to the conditions in the MCA notification |
No exemption for companies using accounting software |
Companies that fall within scope can use our ICFR audit checklist and the CARO 2020 internal audit checklist to test readiness.
The Four Audit Trail Assertions
The auditor’s report must state whether:
- The accounting software has an audit trail feature
- It operated throughout the year for all transactions
- It was not tampered with
- The trail was preserved as the law requires
How Should You Plan Statutory Audit Preparation for FY 2026-27?
Working back from the 31 March year-end spreads the load.
Window | Milestone | Output |
October to December | Mid-year reconciliation of bank, debtors, creditors, assets | Clean ledgers |
January to February | Run a systems and vendor-dues review | Review note |
March | Physical verification and cut-off review | Signed verification reports |
April to May | Close books, book provisions, lock postings | Final trial balance |
June to July | Draft financial statements, hand over the audit pack | Audit pack |
July to August | Fieldwork and queries | Draft auditor’s report |
By 30 September | Board approval and AGM | Signed financial statements |
FY 2025-26 filing window: MCA General Circular 05/2026 (24 October 2026) allows AOC-4 to be filed without additional fee until 31 December 2026 and MGT-7/MGT-7A until 31 January 2027. The AGM deadline is unchanged. If a form is filed after the window, fees run from the original due date. Confirm the current position on mca.gov.in before filing.
Statutory Deadlines After Year-End
Event | Timeline | Provision |
AGM | Within 6 months of year-end | Section 96 |
ADT-1 for auditor appointment | Within 15 days | |
AOC-4 financial statements | Within 30 days of AGM | Section 137 |
MGT-7 or MGT-7A annual return | Within 60 days of AGM | |
Audit file assembly | Within 60 days of the auditor’s report | SA 230 |
Late AOC-4 and MGT-7 filings carry ₹100 per day per form with no cap, and default over three continuous financial years may lead to director disqualification under Section 164(2).
What Common Gaps Should a Statutory Audit Checklist Catch?
These gaps recur across the statutory audit process, so closing them early protects the timeline.
Gap | Why it hurts | Fix |
Audit trail off or not retained | Modified Rule 11(g) report | Enable at database level and retain logs |
Micro and small supplier dues not segregated | Possible disallowance under Section 43B(h), or Section 37(2)(g) of the Income-tax Act, 2025 from tax year 2026-27, plus disclosure risk | Tag micro and small vendors, then age dues monthly against 15 days or the agreed term, capped at 45 days |
Stale debtor and creditor balances | Confirmations fail and provisions get questioned | Reconcile every quarter |
Missing board approvals | Related party and loan entries get queried | Minute approvals before the transaction |
Asset register differs from ledger | Existence cannot be shown | Reconcile twice a year |
No documented controls | Weak internal financial controls report | Maintain and test a control matrix |
Late book closure | Fieldwork gets compressed | Fix a hard close date |
Unsupported cash and bank entries | Gaps in audit evidence | Attach support at posting |
In KPMG’s FY25 review of 93 companies, 48 of the 55 modified audit trail reports also affected Section 143(3)(b) reporting on proper books of accounts. A systems gap therefore becomes an accounting gap.
If your team wants an independent view of where its records stand, a readiness review before year-end can help identify gaps early.
Expert Insight: How Should a CFO Use a Company Audit Checklist?
“Most delays come from documents that exist but cannot be found. A company audit checklist works best as a monthly habit with one owner per line.”
Naveen S N, Chartered Accountant, MSNA & Associates LLP
Our perspective:
- Treat the auditor’s report as a management tool. Emphasis of matter and CARO remarks work as a second look at your controls.
- Share the audit calendar in April. Department heads can then plan evidence requests around it.
- Hold a short review after sign-off. Carry the lessons into next year’s checklist.
Investors and acquirers read audited accounts closely. Our note on financial due diligence in India explains how a well-organised audit file can support due diligence. Reliable monthly reporting helps too, as covered in our piece on management information system software
Who Owns What in Statutory Audit Compliance?
Area | Management | Auditor |
Books of accounts | Maintain and preserve (Section 128) | Verify adequacy |
Financial statements | Prepare and approve (Sections 129 and 134) | Express an opinion |
Internal financial controls | Design and operate | Report on adequacy and effectiveness |
Fraud | Prevent and detect | Report suspected fraud (Section 143(12)) |
Filings | Submit AOC-4 and MGT-7 | Not responsible |
Next Steps On Statutory Audit Checklist
A review of books and controls before year-end can show how statutory audit compliance applies to a specific company. MSNA & Associates LLP is a Bangalore-based CA firm that provides Internal Audit services in audit readiness, due diligence and finance operations.
Prepare Your Company for a Smoother Statutory Audit
FAQs On Statutory Audit Checklist
Is a statutory audit mandatory for every private limited company?
Yes. Statutory audit requirements in India start from the first financial year and continue through years of loss or nil turnover.
Which statutory audit documents does an auditor ask for first?
Usually the trial balance, ledgers, bank statements and prior-year financial statements. Supporting records from the table above follow.
How long does a statutory audit take?
Fieldwork for a typical private company often runs a few weeks. Timing depends on size, complexity and how ready the records are.
What happens if filings miss the due date?
AOC-4 and MGT-7 filed after the due date attract an additional fee of ₹100 per day per form, with no upper cap. Other forms, such as ADT-1, follow a multiplier-based fee schedule. Penalties under the Act may apply separately, depending on the default.
Is internal audit the same as statutory audit?
No. Statutory audit is a legal requirement that ends in an opinion on the financial statements. Internal audit reviews processes for management. See how to determine the scope of an internal audit.
When is AOC-4 due for FY 2025-26?
AOC-4 is due within 30 days of the AGM. For FY 2025-26, MCA General Circular 05/2026 allows it to be filed without additional fee until 31 December 2026, and MGT-7/MGT-7A until 31 January 2027. The AGM deadline is unchanged.
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