Yes, audit is applicable under the ESIC Act

• The Employees’ State Insurance Corporation (ESIC) conducts audits to ensure compliance with statutory provisions of the ESIC Act, 1948.
  
• These audits assess whether employers have correctly registered employees, calculated contributions, and paid dues.
  
• Both internal and external audits may be conducted by ESIC authorities.
  
• Audits ensure that benefits are rightfully extended to eligible insured persons.
  
• Non-compliance identified in an audit can result in penalties, interest, and legal action.
  

Objectives of ESIC audit

• To verify that all eligible employees are registered under the scheme.
  
• To confirm the accuracy of wage records and contribution calculations.
  
• To ensure that monthly returns and payments have been filed on time.
  
• To detect cases of under-reporting, delayed payment, or false declarations.
  
• To check the proper maintenance of ESIC-related records and registers.
  

Types of ESIC audits

• Regular inspection audit: Conducted periodically as per ESIC guidelines.
  
• Surprise or special audit: Initiated based on complaints, irregularities, or random selection.
  
• Internal audit: Conducted by ESIC’s internal audit teams for official review.
  
• External audit: May be performed by government auditors or third-party professionals for large-scale reviews.
  
• Compliance audit: Focuses on return filing, contribution accuracy, and adherence to timelines.
  

Documents required during audit

• Attendance registers and wage sheets of all employees.
  
• Salary slips, bank payment records, and statutory deductions.
  
• Contribution challans, monthly return filings, and e-receipts.
  
• IP number list and employee registration forms.
  
• Any notices, correspondence, or records of previous inspections.
  

Consequences of audit findings

• Demand notice may be issued for short payments or evasion.
  
• Interest and damages can be levied for delayed contributions.
  
• Legal proceedings may be initiated in cases of willful default.
  
• Employers may be directed to rectify records and improve processes.
  
• Positive audit outcomes support smooth compliance ratings and legal standing.