Internal audit conducted by in-house internal auditors o

Co Act 2013 217 views 2 replies

P Ganngopadhyay

C.M(System)

23 Points Joined January 2018

Dear Sir,

In a large PSU, internal audit is conducted by in-house Internal Audit Department along with the external Audit Firms.

In-house Audit Department Members conduct Internal Audit as per direction and submit Internal Audit Report to the Chairman of the Company

After implementation of Companies Act 2013, whether the members of Audit team may be constituted by only B.Tech/ B.E Engineers ( Not being CA/Cost Accountants) and continue submission of Internal Audit Reports?

After incorporation of Company’s Act 2013 (Section 138), are they (only B.E or B. Tech Engineers) are entitled to conduct Internal Audit of the Company and submit Audit Report.

Can you tell me what is the interpretation of the Company’s Act/Rules for this Section 138.

Yours faithfully,

P. Gangopadhyay

Replies (2)

Yash Lahoti

101 Points Joined April 2017

Section 138 uses the term "such other professional as may be decided by the Board", hence B.E./B.Tech Engineers can be appointed as internal auditors. The same must be pursuant to a decision of the board.

In fact, even a non-practicing CA/CWA could be appointed as internal auditor. The important requirement is that he must be a professional, which is not defined. Rule 13 of Companies (Accounts) Rules, 2014 is relevant for this.