Internal Audit Under Section 138 Of The Companies Act, 2013

Internal Audit Applicability – Who should appoint an Internal Auditor?

As per the provisions of Section 138 of the Companies Act, 2013, with rule 13 of the Companies (Accounts) Rules, 2014, specific organizations or companies have an internal audit applicability under the Companies Act 2013. Below, we have given those companies that must appoint an internal auditor-

• All Listed Companies: Every company listed on a stock exchange in India is required to have an internal audit function.
• Unlisted Public Companies: Unlisted public companies meeting any of these criteria during the previous financial year also need an internal audit:
  • Turnover of ₹200 Crore or more.
  • Paid-up share capital of ₹50 Crore or more.
  • Outstanding loans/borrowings exceeding ₹100 Crore from banks/financial institutions at any point.
  • Outstanding deposits exceeding ₹25 Crore at any point.
• Internal audit applicability for Private Companies: Private companies meeting any of the following criteria in the preceding financial year can do the internal audits:
  • Turnover of ₹200 Crore or more.
  • Outstanding loans/borrowings exceeding ₹100 Crore from banks/financial institutions at any point