Statutory Requirements

The following key records are to be maintained by most entities:

• All sums of money received and expended, and the matters in respect of which the receipt and expenditure take place
• All sales and purchases of goods/services by the entity
• The assets and liabilities of the entity
• In case of an entity engaged in manufacturing, processing, mining, etc., such particulars relating to the utilization of material or labor or other items of cost.
• The company shall keep such books of account or other relevant papers available in an electronic mode. Such books of account and other relevant books and papers maintained in electronic mode shall be retained completely in the format in which they were originally generated, sent, or received, or in a format which shall present accurately the information generated, sent, or received, and the information contained in the electronic records shall remain complete and unaltered. As a part of recent amendment, the Companies maintaining books of accounts in electronic mode are required to ensure daily backup on servers physically located in India.

In addition to the above, there may be requirements to maintain additional records under relevant statutes.

The types of mandatory audits to be conducted by an independent practicing Chartered Accountant:

Type of audit ⁹	Timeline	Applicability
Audit under Section 139 of the Companies Act, 2013: Statutory audit##	Within 60 days from the end of the financial year for listed companies and within six months from the end of the financial year for other companies	For listed and other companies
Limited reviews	Within 45 days from the end of the quarter (except the last quarter wherein the reporting is required within 60 days)	Listed companies
Audit of financial statements for tax purpose	30 September in case transfer pricing regulations are not applicable, else 30 November	Companies where the statutory year-end is different from the tax year-end and where tax audit is applicable ¹⁰
Tax audit certification	30 September in case transfer pricing regulations are not applicable, else 30 November	(refer footnote 9 for tax audit applicability)

Companies Act, 2013 requires the management of companies to only use an accounting software that has a feature of recording the Audit Trail and ensure that such logs have been operational throughout the year and cannot be disabled.
Auditor's reporting responsibility in relation to Audit trail:
The auditor must report on three aspects
- 1) Whether the accounting software has the feature of Audit Trail and the same has been in operation throughout the year and for all transactions;
- 2) Whether the feature of the Audit Trail has been tampered with; and
- 3) Whether the Audit Trail has been retained as per legal requirements.

9. This does not include any other audits which are specifically needed under special statutes
10.In India, companies are allowed to follow a different statutory year-end than the fiscal year-end (31 March), provided they satisfy the condition of Section 2(41) of the Companies Act, 2013

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Mayank Lakhani

Member of Managing Committee
Co-CEO - Professional Services, Entity Setup & Management and
Corporate Functions