Audit of a foreign subsidiary in India

Posted by Ca On Web on March 23rd, 2018

In India after incorporating your company, there are various compliances that needs to be followed, one of them is audit. Audits of company accounts have been mandatory for companies in India since the passing of the first Companies Act.  Since then, the Institute of Chartered Accountants of India (ICAI), a statutory body established under the Chartered Accountants Act, 1949, has regulated the profession of chartered accountants in India and ensured the maintenance of accounting standards in India.

An audit is the inspection of an individual or any legal entity’s books and accounts. Audit service provider in India shall be an independent individual who is a practicing Chartered Accountant or firm of Chartered Accountants who is qualified to be auditor as per the law in India. In other words, accountants verify that a company’s business transactions were recorded accurately, and provide a true and fair reflection of that company’s financial situation.

Audit of a foreign subsidiary in India needs an excellent approach, it could be confusing for a person who is doing the business. Therefore tax experts are relied upon in such matters. Experts such as CA can be relied upon however for a business it is very important to have the basic understanding of the provisions applicable to them. Their Tax experts can guide business operators on having a basic understanding. After incorporating a company in India, opening a bank account, The first thing that the company needs to do is appoint an auditor within 30 days of incorporation. The audit appointment process involves various formalities and filing requirement

At caonweb, we the tax experts guide in incorporating a company, audit of any company in India, audit of a foreign subsidiary in India. There are two primary objectives for annual audit in India. The first objective is for auditors to report to stakeholders and the Government whether or not the company’s financial statements provides a true and fair reflection of its state of affairs during the financial year in audit. The second objective is detection and prevention of fraud and error. Hiring an experienced firm to complete annual audit in a timely and accurate manner is critical to achieving both of these objectives.

Summary: Audit service provider in India could be an individual Chartered Accountant in practice or a firm of chartered Accountants who is qualified to do audits.