Stat. audit of partnership firm
This query is : Resolved
15 February 2012
If tax audit is not applicable to the partnership firm, then stat. audit is applicable or not?
I mean do they require to prepare balance sheet and p&l a/c and get it audited by CA ?
Please reply with provision of partnership act.
I mean do they require to prepare balance sheet and p&l a/c and get it audited by CA ?
Please reply with provision of partnership act.
15 February 2012
I think there is no specific provision under partnership act that talk about acconts and audit of accounts of the firm.
17 February 2012
Thanks for reply, but please provide me provision for this thing?
25 July 2025
Great question! Here's the detailed explanation regarding **statutory audit of partnership firms**:
---
### 1. **Is Statutory Audit Applicable to Partnership Firms?**
* **No specific statutory audit requirement** under the **Indian Partnership Act, 1932** mandates a partnership firm to get its accounts audited.
* The **Indian Partnership Act does not have any provision requiring audit of accounts or preparation of Balance Sheet and Profit & Loss Account** by a partnership firm.
---
### 2. **When is Audit Required for Partnership Firms?**
* **Tax Audit under Section 44AB of Income Tax Act, 1961**:
* If the firm's turnover or gross receipts exceed Rs. 1 crore (limit can change with amendments), tax audit is mandatory.
* If tax audit applies, the firm must prepare audited financial statements (Balance Sheet and P\&L).
* **Other laws**:
* Certain industries or contractual obligations may require audits, but this is outside the scope of the Partnership Act.
---
### 3. **Summary**
| Requirement | Applicability to Partnership Firm |
| ------------------------------------- | --------------------------------------- |
| Statutory Audit under Partnership Act | **Not required** (No provision) |
| Tax Audit under Income Tax Act | Required if turnover exceeds threshold |
| Voluntary Audit | Firms may opt for audit for credibility |
---
### 4. **Provisions Reference**
* **Indian Partnership Act, 1932**:
* Does not mention audit or accounts preparation.
* Section 18 allows partners to inspect books of accounts, but no audit requirement.
* **Income Tax Act, 1961**:
* Section 44AB requires tax audit if turnover limit exceeded.
---
### 5. **Conclusion**
* Unless required by tax laws or contractual obligations, a partnership firm is **not mandated by the Partnership Act to get accounts audited**.
* Preparation of financial statements is a **good practice** but not compulsory under the Partnership Act.
---
If you want, I can also share a **simple checklist for preparing accounts for partnership firms** or more details on tax audit. Would you like that?
---
### 1. **Is Statutory Audit Applicable to Partnership Firms?**
* **No specific statutory audit requirement** under the **Indian Partnership Act, 1932** mandates a partnership firm to get its accounts audited.
* The **Indian Partnership Act does not have any provision requiring audit of accounts or preparation of Balance Sheet and Profit & Loss Account** by a partnership firm.
---
### 2. **When is Audit Required for Partnership Firms?**
* **Tax Audit under Section 44AB of Income Tax Act, 1961**:
* If the firm's turnover or gross receipts exceed Rs. 1 crore (limit can change with amendments), tax audit is mandatory.
* If tax audit applies, the firm must prepare audited financial statements (Balance Sheet and P\&L).
* **Other laws**:
* Certain industries or contractual obligations may require audits, but this is outside the scope of the Partnership Act.
---
### 3. **Summary**
| Requirement | Applicability to Partnership Firm |
| ------------------------------------- | --------------------------------------- |
| Statutory Audit under Partnership Act | **Not required** (No provision) |
| Tax Audit under Income Tax Act | Required if turnover exceeds threshold |
| Voluntary Audit | Firms may opt for audit for credibility |
---
### 4. **Provisions Reference**
* **Indian Partnership Act, 1932**:
* Does not mention audit or accounts preparation.
* Section 18 allows partners to inspect books of accounts, but no audit requirement.
* **Income Tax Act, 1961**:
* Section 44AB requires tax audit if turnover limit exceeded.
---
### 5. **Conclusion**
* Unless required by tax laws or contractual obligations, a partnership firm is **not mandated by the Partnership Act to get accounts audited**.
* Preparation of financial statements is a **good practice** but not compulsory under the Partnership Act.
---
If you want, I can also share a **simple checklist for preparing accounts for partnership firms** or more details on tax audit. Would you like that?
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