Celling limit of audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2014 sir my query regarding celling limit of tax audit as well as statutory audit
from f.y. 2014-2015 a ca can do 60
tax audit
if a ca do 20 statutory audit of pvt company (below 1 croes) den he can accept 10 more tax audit of pvt co (as per ICAI in total 30 companies)
but as per company act 20 company
example:

if ca do 60 tax audit (40 +20 of pvt company)
he can accept or not statutory audit of pvt co.(below 1 croes)after 20 tax audit of pvt co.

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2014 sir my query regarding celling limit of tax audit as well as statutory audit

from f.y. 2014-2015 a ca can do 60 tax audit if a ca do 20 statutory audit of pvt company (below 1 croes) den he can accept 10 more tax audit of pvt co (as per ICAI in total 30 companies)
but as per company act 20 company
example: if ca do 60 tax audit (40 +20 of pvt company) he can accept or not statutory audit of pvt co.(below 1 croes)after 20 tax audit of pvt co.

Read more at: https://www.caclubindia.com/experts/modify_message.asp?entry_id=917281

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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18 July 2024 The limit on the number of audits that a Chartered Accountant (CA) can undertake is governed by both the Chartered Accountants Act, 1949 and the Companies Act, 2013. Here’s how these limits generally apply:

### Tax Audit (Section 44AB of Income Tax Act):

1. **Total Tax Audits**: A CA can undertake a maximum of 60 tax audits per financial year. This includes audits under Section 44AB of the Income Tax Act, which applies to entities meeting specified turnover and income criteria.

2. **Composition of Tax Audits**:
- **Individuals/Partnership Firms**: Audits conducted under Section 44AB for individuals and partnership firms.
- **Companies**: Audits conducted under Section 44AB for companies, which can include both public and private companies.

### Statutory Audit (Companies Act, 2013):

1. **Private Companies Below Rs. 1 Crore**: According to the Companies Act, 2013, a CA can undertake the statutory audit of up to 20 private companies in a financial year if these companies have a turnover of less than Rs. 1 crore.

### Interaction Between Tax Audit and Statutory Audit Limits:

1. **Tax Audit and Private Companies**: If a CA has conducted tax audits for private companies (below Rs. 1 crore turnover), after completing 20 such audits, they can still undertake statutory audits of private companies below the threshold. However, the CA cannot undertake statutory audits for more than 20 such private companies in a financial year under the Companies Act, 2013.

2. **Total Audits**: The total number of audits (both tax and statutory) a CA can undertake in a financial year cannot exceed 60. This includes all types of audits mentioned above.

### Practical Example:

- If a CA has completed 60 tax audits (which could include audits for individuals, partnership firms, and companies), they cannot take on any additional tax audits during that financial year.

- Regarding statutory audits of private companies below Rs. 1 crore turnover:
- After completing 20 tax audits for such private companies, the CA can undertake statutory audits for up to 20 private companies below the turnover threshold, provided the total number of audits (including other types) does not exceed 60.

### Conclusion:

The limits on tax audits and statutory audits are designed to ensure that CAs maintain quality and compliance while managing their audit workload. It's important for CAs to adhere to these limits to comply with regulatory requirements set by the ICAI and the Companies Act, 2013. Exceeding these limits may result in penalties or other disciplinary actions by regulatory authorities.

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