INTERNAL AUDIT

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 February 2010 Could you please confirm what is the requirement for Internal Audit. Our Share Capital is Rs 184.60 Million

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2010 Could you please give me a reply

Thanks

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

01 August 2024 To determine the requirement for internal audit based on the share capital of Rs. 184.60 million, let's review the relevant provisions under the Companies Act, 2013, specifically focusing on the requirements for companies with respect to internal audit:

### **Internal Audit Requirement:**

Under the Companies Act, 2013, the requirement for internal audit is outlined in Section 138 and Rule 13 of the Companies (Accounts) Rules, 2014. Here are the key details:

#### **1. **Requirement Under Section 138:**

**1.1 Applicability:**
- **Listed Companies:** Internal audit is mandatory for all listed companies.
- **Unlisted Public Companies:** Internal audit is required if:
- The paid-up capital exceeds Rs. 50 crore.
- The annual turnover exceeds Rs. 200 crore.
- The outstanding loans or borrowings from banks and public financial institutions exceed Rs. 100 crore.

**1.2 Other Companies:**
- Companies not falling under the above criteria are not mandated by law to have an internal audit, but they can opt to do so voluntarily.

#### **2. **Specific Requirement Based on Your Share Capital:**

Given your share capital of Rs. 184.60 million (which is approximately Rs. 18.46 crore), the applicability of internal audit requirements would be as follows:

**2.1 Share Capital Exceeds Rs. 50 Crore:**
- Since your share capital exceeds Rs. 50 crore, the requirement for internal audit under Section 138 would apply to your company.

**2.2 Considerations for Internal Audit:**
- **Mandatory Internal Audit:** As your share capital exceeds Rs. 50 crore, your company is required to have an internal audit as per Section 138 of the Companies Act, 2013.
- **Audit Committee:** You should ensure that an Audit Committee is in place, as required by the Act, to oversee the internal audit process.

#### **3. **Additional Provisions:**

- **Scope and Implementation:** The scope of internal audit should be defined and implemented as per the guidelines issued by the Institute of Chartered Accountants of India (ICAI) and the company’s own internal policies.

**4. **Conclusion:**

Given that your share capital is Rs. 184.60 million (Rs. 18.46 crore), you are required to have an internal audit as per the Companies Act, 2013. Ensure that your company complies with the provisions under Section 138 and maintains an internal audit system that meets regulatory requirements.

If you have any specific questions or need further clarification, consulting with a professional accountant or legal advisor would be beneficial.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok