1. Appointment of Statutory Auditor

• Every Public Limited Company must appoint a statutory auditor under Section 139 of the Companies Act, 2013.
  
• The auditor is appointed by the Board of Directors at incorporation and subsequently by the members at the Annual General Meeting (AGM).
  
• The auditor holds office for a term of five years, subject to ratification and conditions.
  
• For listed companies and certain classes of public companies, auditor rotation is mandatory after a maximum of one or two terms.
  
• The appointment is filed with the Registrar of Companies (ROC) in Form ADT-1.
  

2. Scope and Planning of the Audit

• The audit covers examination of the company’s books of accounts, financial statements, internal controls, and compliance records.
  
• The auditor plans the audit based on risk assessment, materiality, and business operations.
  
• Audit areas typically include revenue, expenses, assets, liabilities, share capital, and compliance with accounting standards.
  
• For listed companies, additional reviews may include corporate governance, internal financial controls, and related-party transactions.
  
• An audit plan is prepared, and initial documents are requested from the company.
  

3. Execution of the Audit

• The audit is conducted in phases: interim audit, year-end audit, and final audit review.
  
• Auditors test accounting records, vouchers, invoices, bank statements, ledgers, and statutory filings.
  
• They verify the accuracy of financial statements prepared by Indian Accounting Standards (Ind AS) or notified accounting standards.
  
• The auditor evaluates internal controls and ensures compliance with tax laws, Companies Act, and SEBI regulations (if applicable).
  
• Management representation is obtained to confirm the authenticity of records and disclosures.
  

4. Auditor’s Report and CARO Requirements

• The auditor issues an Independent Auditor’s Report addressed to shareholders.
  
• It contains an opinion on whether the financial statements give a true and fair view of the company’s financial position.
  
• Public companies also require reporting under the Companies (Auditors’ Report) Order, 2020 (CARO, 2020).
  
• CARO mandates additional reporting on loans, inventories, statutory dues, frauds, internal audits, and more.
  
• In case of listed companies, the auditor also certifies quarterly results and internal control adequacy.
  

5. Filing and Disclosures

• The audited financial statements, along with the auditor’s report, must be approved by the Board of Directors and adopted at the AGM.
  
• The company files the audited financials with the ROC through Form AOC-4 (or AOC-4 XBRL for eligible companies).
  
• Form MGT-7 (Annual Return) and Form ADT-1 (auditor details) are also filed.
  
• Listed companies must submit their audited results and reports to the stock exchanges within prescribed timelines under SEBI (LODR) Regulations.
  
• The auditor may also attend the AGM to answer shareholder queries on the audit report.