Meaning and Process explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Internal audit is an independent, ongoing review of a company's controls and processes for management. Here is what it involves.
What it does
- Evaluates internal controls and risk management
- Checks compliance with policies and laws
- Recommends improvements to processes and efficiency
Who needs it (Section 138)
Mandatory for certain companies based on turnover, borrowings and paid-up capital thresholds.
Process
- Plan based on risk assessment
- Test controls and transactions
- Report findings to the audit committee/management
Frequently Asked Questions
What is internal audit?
An independent, ongoing review of a company's controls, risks and processes for management.
Is internal audit mandatory?
Yes — for certain companies under Section 138 based on size thresholds.
How is internal audit different from statutory audit?
Internal audit is ongoing and management-focused; statutory audit is annual and for shareholders.
Who does internal audit report to?
The audit committee or management.
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