Accounting & Assurance Services in India

Yes — there is no turnover or profitability threshold that exempts a company from statutory audit under the Companies Act, 2013. ‘Small company’ status does relax a handful of other compliance items (for example, a small company isn’t required to include a cash-flow statement in its financial statements), but the requirement to have annual accounts audited by an independent chartered accountant applies to every company, from its first financial year onward.

The board appoints the company’s first auditor within 30 days of incorporation, to hold office until the conclusion of the first AGM. From that AGM onward, shareholders appoint the statutory auditor for a five-year term under Section 139 of the Companies Act — and since a 2018 amendment removed the annual-ratification requirement, that appointment doesn’t need to be re-confirmed every year. What does recur every year is the audit itself, the AGM, and the AOC-4/MGT-7 filings that follow it.

Section 128 of the Companies Act requires every company to maintain proper books of account on an accrual basis, under the double-entry system, at its registered office (or another India location notified to the Registrar), and to preserve them for at least eight financial years. This is a standalone compliance obligation, not just good practice — an auditor working from incomplete or non-accrual-basis books generally can’t issue an unqualified audit opinion, which is why bookkeeping quality and statutory-audit readiness are really the same workstream rather than two separate ones.

They’re three separate requirements under two different laws, and an Indian subsidiary can be subject to more than one in the same year: statutory audit (Companies Act, mandatory for every company regardless of size), tax audit (Income Tax Act Section 44AB, triggered once turnover crosses the applicable threshold, reported on Form 3CD), and internal audit (Companies Act, mandatory for a private company only once it crosses specified turnover or borrowing thresholds under the Companies (Accounts) Rules, 2014 — a later-stage requirement most newly-set-up subsidiaries won’t hit immediately, but worth planning for).

GST registration isn’t automatic on incorporation — it’s triggered once aggregate turnover crosses the applicable threshold, currently Rs 20 lakh for a services business in most states and Rs 40 lakh for goods, the same thresholds covered in our company registration guide. Many foreign-owned entities register voluntarily well before crossing that threshold, particularly where the Indian entity invoices only its overseas parent, since registration allows filing a Letter of Undertaking and treating those invoices as zero-rated exports. Once registered, GST compliance becomes a recurring monthly (or quarterly, under the QRMP scheme for smaller filers) obligation rather than a one-time filing.

Engagements are run by a consistent team assigned to your entity — not a rotating pool picking up tickets — because statutory audit, tax and RoC filings all draw on the same books, and continuity matters more here than in generic data-entry bookkeeping. The cadence is set upfront: monthly close and MIS, quarterly review against the compliance calendar (advance tax, TDS returns, GST), and a year-end push aligned to your AGM and audit timeline, rather than reactive work picked up only when a deadline is close.

A bookkeeping vendor can enter transactions and reconcile accounts; getting a foreign-owned subsidiary through a clean statutory audit, an accurate tax position, and its RoC and FEMA filings in the same year takes accounting, tax and company-secretarial work drawing on the same numbers at the same time. Our accounting and assurance team sits inside the same firm that handles company registration, FEMA/RBI reporting and tax advisory for the same clients, so the books we keep are built from month one to support the audit, the return, and the filings that ultimately rely on them.