Auditing is an essential financial procedure for most companies regardless of scale and sector. It aims to inspect their books of accounts, for examining the business’ fair approach towards commerce.
Almost all enterprises have to go through this procedure each year. Therefore, knowing the fundamental difference between different types of auditing is necessary. Presently, the three main types of audits done are Statutory, Tax and GST.
In this article, we shall discover the key differences between these three types of auditing to help you understand the concept better as well as some of the reputed audit firms in Delhi whom you can consult.
1. Statutory Auditing
Statutory Auditing is a mandatory audit for all the companies incorporated under Companies Act. The goal behind it is to verify the compliance of the enterprises with the regulations given in The Companies Act.
Since it is not a conditional audit, even the companies that don’t have a turnover must get statutory auditing done by a chartered accountant.
- Due Date
The due date of the audit is six months before the end of the financial year and the Annual General Meeting.
In case of non-compliance, the company can be penalised between INR 25,000 to INR 5,00,000. Moreover, each defaulter might have to pay a fine of INR 10,000 to INR 1,00,000 or even face one year of imprisonment.
2. Tax Auditing
Tax audits are the inspection of the taxpayers’ books of accounts. It is a conditional procedure to check the compliance of a business or an individual with The Income Tax Act. It is also beneficial for making income tax returns.
Not all companies are eligible for tax auditing. Only those with a total sales, turnover or gross receipt of more than one crore per year must get tax auditing done. Also, the individuals with a gross receipt exceeding INR 50,000 have to undergo the process.
But if the company follows the Presumptive Taxation Scheme, then they do not have to conduct tax audits.
- Due Date
For a successful tax audit, you must complete the auditing and file the report with the Income Tax Department by the 30th September of the year following the financial year.
In case of non-compliance, the defaulter can either be penalized INR 1,50,000 or 0.5% of the total sales, turnover or gross receipt.
3. GST Auditing
GST audit is the latest type in which the examination of the transactions, records, returns and other financial statements of a person or the company registered under the Goods and Service Act takes place.
The audit ensures the following of regulations mentioned in the act and whether or not the correctness in stating financial details is maintained.
If the entity’s turnover exceeds the limit of INR 2 crores, then they are required to file the GST audits.
- Due Date
The last date for submitting GST audit report is 30th December of the subsequent financial year.
In case of non-compliance, there exists no special provision as of now. A fine of INR 25,000 can be issued in the name of the entity.
Some Well-Established Audit Firms In Delhi
If you’re looking for a qualified, authentic and well-experienced audit firm for various kinds of auditing and report filing, have a look at the names of some of such organisations mentioned below:
- Dewan P.N. Chopra and Co
- Desai Haribhakti and Co
- SN Dhawan and Co LLP
- Nangia and Co LLP
- Neeraj Bhagat and Co
Auditing is one of the many financial procedures that you must strictly adhere to (if you are eligible for it). Not all business owners can manage and understand the official and legal matters, hence consulting an audit firm is recommended for all. With their assistance and guidance, you can easily comply with the regulations and avoid penalties.