Internal Audit Services
Internal audit services under Section 138 of the Companies Act by Tulshyan & Co., Chartered Accountants in Raipur — stronger controls, real assurance
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Quick Summary
Internal audit is an ongoing, independent review of a company's operations, risk management, and internal controls — distinct from the statutory audit, which is an annual, backward-looking check on financial statements. It's mandatory for listed companies, and for unlisted public and private companies once they cross specific turnover, capital, or borrowing thresholds under Section 138 of the Companies Act, 2013. At Tulshyan & Co., we design internal audit engagements that go beyond a compliance checkbox — genuinely strengthening how a business manages risk day to day.
What Is Internal Audit?
Internal audit is a systematic, independent evaluation of a company's internal controls, risk management processes, and governance — conducted throughout the year rather than as a single annual exercise.
Governed by Section 138 of the Companies Act, 2013, read with Rule 13 of the Companies (Accounts) Rules, 2014.
The internal auditor can be a Chartered Accountant, Cost Accountant, or another professional decided by the Board — and may or may not be an employee of the company, and may or may not be in practice.
Under Section 144(b), the company's statutory auditor cannot simultaneously act as its internal auditor — the two roles must stay independent of each other.
The Audit Committee (or the Board, where there's no Audit Committee) works with the internal auditor to define the scope, methodology, and frequency of internal audits based on the company's specific risk areas.
Who Needs an Internal Audit?
- All listed companies — mandatory, regardless of size.
- Unlisted public companies, if any of the following applied in the preceding financial year:
Turnover of ₹200 crore or more, or
Paid-up share capital of ₹50 crore or more, or
Outstanding loans or borrowings from banks/public financial institutions exceeding ₹100 crore at any point, or
Outstanding deposits of ₹25 crore or more at any point. - Private companies, if either of the following applied in the preceding financial year:
Turnover of ₹200 crore or more, or
Outstanding loans or borrowings from banks/public financial institutions exceeding ₹100 crore at any point. - A company that newly crosses any of these thresholds must comply — including appointing an internal auditor — within six months of the section becoming applicable to it.
Internal Audit vs Statutory Audit — What's the Difference?
This is the distinction clients ask about most:
- Timing: Statutory audit is an annual, year-end exercise. Internal audit is ongoing throughout the year, often quarterly or based on a rolling plan.
- Purpose: Statutory audit gives external stakeholders (shareholders, lenders, regulators) an opinion on whether the financial statements are true and fair. Internal audit gives the company's own management and Audit Committee an assessment of how well internal controls and processes are actually working.
- Who it reports to: The statutory auditor reports to shareholders at the AGM. The internal auditor reports to the Audit Committee or Board.
- Independence requirement: The two functions must be kept separate — the same person or firm cannot perform both for the same company in the same year.
- Scope: Statutory audit is financial-statement-focused. Internal audit can cover operational efficiency, fraud risk, process gaps, IT controls, and compliance — well beyond just the numbers.
See our Statutory Audit Services page for the annual financial statement audit.
Why Internal Audit Matters
- Catches problems early, not a year later — because it runs throughout the year rather than as a single annual check.
- Strengthens the control environment that the statutory auditor later relies on and tests.
- Reduces fraud risk through regular, independent review of processes rather than periodic sampling alone.
- Supports better board decisions — the Audit Committee gets ongoing visibility into operational risk, not just year-end financial results.
- Increasingly expected by investors and lenders, even at companies below the mandatory threshold, as a sign of mature governance.
What Internal Audit Typically Covers
- Review of internal financial controls — testing whether controls over financial reporting are designed properly and actually operating as intended.
- Process and operational reviews — procurement, inventory management, payroll, and other core business cycles.
- Compliance checks — verifying adherence to internal policies as well as applicable statutory and regulatory requirements.
- Risk assessment — identifying and evaluating operational, financial, and fraud risks specific to the business.
- Follow-up on prior findings — checking whether previously identified control gaps have actually been closed.
- Reporting to the Audit Committee/Board, with practical recommendations rather than just a list of issues.
Internal Audit Services by Tulshyan & Co.
Tulshyan & Co., Chartered Accountants in Kamal Vihar, Raipur, conducts internal audits for private and public companies across Chhattisgarh — designed around each company's actual risk areas, not a generic checklist, and reported directly to the Audit Committee or Board.
Get in touch with Tulshyan & Co. for internal audit services in Raipur that give management real visibility into how the business is actually running.
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