SaaS Metrics, Ecommerce Reconciliation & Statutory Audits
Accounting and auditing requirements vary by entity size, business model, and statutory regulations under the Companies Act, 2013.
| Standard category | Current verified position | Key requirement |
|---|---|---|
| Statutory Audit (Companies) | Mandatory annual audit of company financial statements under the Companies Act, 2013. | Applies to all private and public limited companies regardless of turnover. |
| SaaS Revenue Recognition | Aligning accounting with Ind AS 115 / IFRS 15 for subscription contracts. | Requires tracking MRR, ARR, LTV, CAC, and deferred revenue schedules. |
| Ecommerce Reconciliation | Reconciling sales invoices with payment gateway receipts and marketplace reports. | Auditing TCS under Section 52 and marketplace commission invoices. |
| Internal Audit (Turnover) | Mandatory internal control audits for companies exceeding thresholds. | Turnover > Rs. 200 Crore or outstanding loans/deposits > Rs. 100 Crore. |
What a serious auditor should verify
- Management Accounts & MIS: Monthly P&L, Balance Sheet, Cash Flow statement, AR/AP ageing report, and key business metrics (burn rate, gross margins).
- Concurrent Audit: Real-time, continuous audit of bank branches or high-volume transactions to prevent leakage and ensure compliance.
- Stock and Inventory Audit: Verification of physical stock against books to identify variance, shrinkage, or write-off items.
- Accounts Payable/Receivable: Maintain clean vendor aging reports and follow up on outstanding credit periods.
Documents for accounting and statutory audits
- Trial balance, ledger files, and bank statements for the audit period.
- Sales and purchase invoice registers.
- TDS, GST, and payroll returns history.
- Physical stocktake reports and bank confirmation letters.
Auditing FAQ India: year and source check
Last fact-checked: 18 June 2026.
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FAQs
Is a statutory audit mandatory for all private limited companies in India?
Yes. Under the Companies Act, 2013, every private limited company must appoint a statutory auditor and undergo an annual statutory audit, irrespective of its turnover or capital.
What is the threshold for mandatory tax audit under Section 44AB?
A tax audit is mandatory if business turnover exceeds Rs. 10 Crore (provided cash transactions are <= 5% of total transactions) or Rs. 1 Crore (if cash transactions exceed 5%). For professionals, the limit is Rs. 50 Lakh.
How does SaaS accounting handle subscription revenue?
Under Ind AS 115, subscription revenue must be recognized over the performance period (monthly/quarterly) as the service is delivered, rather than recognizing upfront collections on day one. Unearned fees are deferred to the balance sheet.
Frequently Asked Questions
1. What is the primary role of accounting and bookkeeping in relation to Auditing FAQ India?
Bookkeeping is the systematic recording of daily financial transactions for Auditing FAQ India. Accounting involves summarizing, analyzing, interpreting, and reporting these transactions to prepare financial statements and tax filings.
2. What is a Statutory Audit, and does it apply to Auditing FAQ India?
A statutory audit is an official review of a company's financial records to verify they present a true and fair view. Under the Companies Act, 2013, a statutory audit is mandatory for all incorporated companies (Private Limited, Public, OPC) carrying out activities like Auditing FAQ India, regardless of turnover or capital.
3. What is a Tax Audit under Section 44AB, and how does it relate to Auditing FAQ India?
A tax audit is a review of books of accounts to ensure tax compliance under Section 44AB. It is mandatory if a business's annual turnover exceeds ₹1 crore (or ₹10 crore if 95% of receipts and payments are digital) or if a professional's gross receipts exceed ₹50 lakh, which applies directly to Auditing FAQ India activities.
4. What is the due date for filing a Tax Audit report?
The due date to submit the Tax Audit report (Form 3CA/3CB and 3CD) on the income tax portal is September 30 of the Assessment Year (one month prior to the ITR filing deadline of October 31).
5. What is an Internal Audit? Who needs it?
An internal audit is an independent appraisal of an organization's internal controls, processes, risk management, and governance. Under Section 138 of the Companies Act, specific classes of listed and unlisted companies must appoint an internal auditor.
6. What is a Virtual CFO?
A Virtual CFO (Chief Financial Officer) is an outsourced service provider that offers strategic financial management, forecasting, budgeting, cash flow planning, and compliance oversight to startups and SMEs on a part-time or advisory basis.
7. What is UDIN, and why is it mandatory for CAs?
UDIN (Unique Document Identification Number) is a unique 18-digit number generated by Chartered Accountants on the ICAI portal for every certificate, audit report, and document they sign. It prevents forgery and verifies the document's authenticity.
8. What is the threshold for mandatory appointment of an Auditor in a Company?
Every company must appoint its first auditor within 30 days of incorporation at the board level. The auditor is then ratified/appointed in the first Annual General Meeting (AGM) for a term of 5 years.
9. What are the common accounting software used by Indian businesses?
Common software includes TallyPrime (widely used for traditional accounts/inventory), Zoho Books (cloud-based, modern compliance), QuickBooks, Busy, and custom ERP systems like SAP or Oracle.
10. What is a Net Worth Certificate? Who issues it?
A Net Worth Certificate states the financial worth of an individual or entity (assets minus liabilities). It must be certified by a practicing Chartered Accountant (CA) with a valid UDIN and is required for visa applications, tenders, and bank loans.
11. What is a Solvency Certificate?
A Solvency Certificate is a document showing that an individual or entity is financially stable and capable of meeting their financial liabilities. It is issued by a commercial bank or a Chartered Accountant based on asset holdings.
12. What is CARO (Companies Auditor's Report Order)?
CARO is an additional reporting requirement for statutory auditors of specific companies. The auditor must report on specific matters like fixed assets, inventory, loans, internal controls, statutory dues, and transactions with related parties.
13. What is the penalty for late filing of financial statements (AOC-4) with ROC?
The late fee for filing Form AOC-4 (Financial Statements) is ₹100 per day of delay. Additionally, the company and its directors can be penalized for non-compliance.
14. What is the difference between cash system and accrual system of accounting?
Cash accounting records revenues when cash is received and expenses when cash is paid. Accrual accounting records revenues when earned and expenses when incurred, regardless of cash flow. Companies must follow the accrual system.
15. What are Accounting Standards (AS) and Ind AS?
Accounting Standards (AS) are guidelines issued by the ICAI to standardize accounting practices. Ind AS (Indian Accounting Standards) are aligned with global IFRS standards and are mandatory for listed companies and large unlisted companies with net worth >= ₹250 crore.