Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Who must have it
Listed companies, and unlisted/private companies above prescribed turnover/borrowing/capital limits. Confirm thresholds.
Voluntary for others
Smaller companies often run an internal audit anyway to strengthen controls — see our internal audit service.
What an internal audit adds
Internal audit is about systems, not the statutory opinion: it tests whether controls over purchases, sales, payroll, inventory and cash are working and where money could leak. For companies crossing the Section 138 thresholds it’s mandatory, and the internal auditor — who can be a CA, cost accountant or other professional, in practice or in-house — reports to the board or audit committee. Smaller companies often adopt it voluntarily once they scale, because the cost of a control failure (stock shrinkage, duplicate payments, revenue leakage) outweighs the review fee. The scope is agreed with management, so it can be focused on the areas of real risk. A well-run internal audit also makes the year-end statutory audit smoother, since weaknesses are caught and corrected through the year rather than surfacing as findings at the close.