Under Section 138 of the Companies Act, 2013 and Rule 13 of the Companies (Accounts) Rules, certain companies must appoint an internal auditor. The internal auditor can be a Chartered Accountant, a Cost Accountant or another professional decided by the board, and can be an employee of the company.
For other businesses, an internal audit is voluntary but useful. It checks whether controls over purchases, sales, inventory, payroll and cash are working, and finds problems before the year-end statutory audit does.
Key points
- All listed companies
- Unlisted public companies with paid-up capital of ₹50 crore or more, turnover of ₹200 crore or more, borrowings of ₹100 crore or more, or deposits of ₹25 crore or more
- Private companies with turnover of ₹200 crore or more, or borrowings of ₹100 crore or more
- The audit committee or board decides the scope, frequency and method
- Thresholds are tested on the previous financial year
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
CA Rahul Rajendra MohiteACA, M.Com · ICAI Membership No. 622387 · Founder, Rahul R. Mohite & Co., PuneFirm profile and key facts