Statutory Audit & Cash flow

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This discussion clarifies the requirements for statutory audits, noting they are mandatory for all companies regardless of financial thresholds. LLPs have specific turnover and contribution limits for audits. Key compliances include auditor appointment, reporting, and filing specific forms. Regarding cash flow statements, the indirect method is standard for statutory audits and financial reporting, while the direct method is preferred for internal management reports. Both methods present the same net cash flow, differing mainly in presentation.

Hukam Chand

Hukam Chand (Querist)

12 December 2025 Hi CA Club Expert Team,
I want to understand everything about Statutory Audit—on whom it is applicable, whether there are any threshold limits such as value, turnover, profit, or loss limits, whether there is any specific due date for filing returns, and what compliances are required. any form name Please explain all these points in a point-wise manner.

My second query is: In general, for any Private Limited Company, Public Limited Company, LLP, or Firm, which method of Cash Flow Statement is followed—the Direct Method or the Indirect Method?
I want to know which method is typically used for internal reporting such as weekly or monthly cash flow reports for management, and which method is required or followed during audits.
Please explain point-wise with suitable examples.
Thanks & regards
Deepak

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

13 December 2025 Statutory audit is mandatory for all companies without any threshold, irrespective of turnover, profit or loss.

LLPs require audit only if turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh.

Audit involves auditor appointment, audit report, AGM, and filing forms ADT-1, AOC-4, MGT-7.

Cash Flow Statement is mandatory for companies (except OPC & small companies).

Indirect Method is almost always used for statutory audit and financial reporting.

Direct Method is preferred for internal management reporting like weekly or monthly cash flow.

Both methods ultimately show the same net cash flow, only presentation differs.

Hukam Chand

Hukam Chand (Querist)

13 December 2025 Hi Ashok ,
Thanks for sharing the update with me but something is missing i.e. statuatory audit date is not mention and other dates are not mentioned in the previous conversation
so i request you to Kindly share with me all the respective update

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