FinTech Glossary

What is Audit

An audit is an independent examination of a company’s financial statements, records, and internal controls to assess whether they present a true and fair view of the organisation’s financial position.

Business Context

Audits help Indian businesses meet statutory requirements under the Companies Act, Income Tax Act, GST laws, and other regulatory frameworks.

They strengthen financial discipline, ensure transparency, and build trust with investors, lenders, auditors, customers, and internal stakeholders.

Types of Audits

1. Statutory Audit - Mandatory review of financial statements for companies and certain entities as per the Companies Act.
2. Internal Audit - Ongoing assessment of internal controls, processes, and risk systems to ensure operational efficiency.
3. Tax Audit - Required under Section 44AB of the Income Tax Act for businesses above the specified turnover thresholds.
4. GST Audit - Review of GST filings, input tax credit, and compliance accuracy (applicable under certain turnover limits or notices).
5. Special / Compliance Audits - Audits ordered by regulators, lenders, or investors to examine specific areas like expenses, systems, or governance.