SECTION 138 INTERNAL AUDIT COMPANIES ACT 2013



Posted on 18-04-2016        By ADMIN



SECTION 138: INTERNAL AUDIT COMPANIES ACT 2013   

Classes of companies requiring Internal Audit  

The following class of companies shall be required to appoint an internal auditor or a firm of internal auditors:-  

(a) every listed company;  

(b) every unlisted public company having –  

(i) paid up share capital of fifty crore rupees or more during the preceding financial year; or  

(ii) turnover of two hundred crore rupees or more during the preceding financial year; or  

(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or  (iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year; and  

 COMPANIES ACT 2013  

  (c) every private company having –  

(i) turnover of two hundred crore rupees or more during the preceding financial year; or  (ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year.  

An existing company covered under any of the above criteria shall comply with the requirements of section 138 and this rule within six months of commencement of such section.  

The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.  

The company board shall be free to appoint any practicing Chartered Accountant or a Cost Accountant or any other person whom it deems fit to be appointed as its internal auditor. For this purpose, company board may consider the nature and volume of business of company; qualifications, experience and capabilities of such person being appointed as auditor and scope of internal audit. 



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