Statutory audit checklist: what to have ready 30 days before sign-off

Every private limited company in India needs a statutory audit. Section 139 of the Companies Act, 2013 requires every company to have an auditor appointed; Section 143 defines the audit’s scope; Section 134 requires the board to attach the audited financials to its report when accounts are adopted at the AGM. The window between books-closing and audit sign-off is typically three to four weeks for a clean engagement — longer when reconciliations have been deferred. This checklist describes what should be in the auditor’s hands on Day 1 of fieldwork, organised by area.

Books and trial balance

The starting point is a closed trial balance. Closed means: all bank transactions posted and reconciled, all GST returns filed and matched, all TDS deducted and deposited, all payroll runs through, all stock counts done, all year-end accruals booked. We ask for:

• Trial balance as at 31 March, with sub-ledger detail (debtors party-wise, creditors party-wise, expense ledger party-wise)
• General ledger printouts or exports for the full year
• Bank statements for every account, with bank reconciliation statements as at year-end
• Cash book and physical cash count certificate (if cash balance is material)
• Last year’s audited financial statements and the prior auditor’s working papers (if available)

GST reconciliation

The single most time-consuming reconciliation in a modern audit. The auditor needs to tie the books-of-account turnover to the GSTR-1, GSTR-3B, GSTR-2B (or the IMS view from 2025 onwards) and the annual GSTR-9 / 9C. Each direction can throw up timing differences that need a closure note.

• GSTIN-wise GSTR-1 and GSTR-3B for every month of the year
• GSTR-2B (or the equivalent IMS extract) for the inward-supplies side
• Annual return GSTR-9 (mandatory above ₹2 crore turnover) and the GSTR-9C reconciliation (above ₹5 crore)
• E-way bill register and e-invoice register (where applicable)
• Internal turnover reconciliation: books-of-account vs GSTR-1 vs GSTR-3B, with closure notes on every variance
• Input tax credit register, with the GSTR-2B match-status and an ageing of unmatched credit

TDS and TCS schedules

Tax-deducted-at-source compliance touches the P&L (expense allowability), the balance sheet (TDS payable, TDS receivable), the cash flow (statutory payments), and the tax position (Section 40(a)(ia) disallowance exposure). The auditor needs:

• Quarterly TDS returns (Form 24Q, 26Q, 27Q — renumbered to Form 138, 140, 144 under ITA 2025 from FY 2026-27) with acknowledgement and challan copies
• Form 26AS / AIS extracts for the company’s PAN, reconciled to TDS receivable in the books
• Section-wise TDS deduction analysis: 192 (salary), 194C (contractor), 194J (professional / FTS), 194I (rent), 194Q (purchase), 194O (e-commerce) etc.
• Outward TCS records under Section 206C, where applicable
• A working showing items where TDS could be due but wasn’t deducted — the Section 40(a)(ia) exposure list

Statutory registers and the Companies Act side

The Companies Act 2013 mandates a set of statutory registers and board records that the auditor reviews to form the opinion on Section 143 statutory matters and to support CARO 2020 reporting.

• Section 88 registers: members, debenture-holders, charges, beneficial ownership (Section 89 declarations)
• Section 170: register of directors and key managerial personnel, with their shareholding
• Section 186: register of loans, guarantees, securities, investments — with the Section 186(2) cap working
• Section 189: register of contracts in which directors are interested (related-party transactions)
• Section 90: register of significant beneficial owners (SBO)
• Board meeting minutes and resolutions for every meeting in the year
• Notice and minutes of the AGM and any EGMs
• Statutory filings: AOC-4, MGT-7 (or MGT-7A for small / OPC), DIR-3 KYC, DPT-3, MSME-1 — with SRN numbers

Fixed assets and CWIP

The Fixed Asset Register and capital work-in-progress need physical verification, additions and deletions support, and depreciation rate verification.

• Fixed Asset Register with opening WDV, additions, deletions, depreciation and closing WDV — matched to the balance sheet
• Capitalisation memos for every Capex addition
• Physical verification report (typically once every three years for routine assets, more frequent for high-value or movable assets)
• Depreciation working under Schedule II of the Companies Act — useful life based, not the older WDV rates
• CWIP ageing: how long each item has been under construction, when it’s expected to be capitalised, any impairment indicators

Related-party transactions and Section 188

This is where audits hit speed-bumps when the underlying documentation isn’t in place. Every related-party transaction under Section 188 needs board approval (Audit Committee approval too, where applicable) before the transaction. Retrofitting approvals after the year-end is messy.

• Schedule of all related-party transactions (Section 188 + Ind AS 24 / AS 18 definitions)
• Board / Audit Committee resolutions approving each transaction
• Arm’s-length-pricing evidence, especially for related-party loans, services and royalty arrangements
• Reconciliation of related-party balances at year-end with the related party’s confirmation

Going concern, internal control and management representations

The pre-audit pack also needs the soft-but-mandatory items:

• Cash-flow projection for the next 12 months (for the going-concern assessment under SA 570)
• Schedule of pending litigations and contingent liabilities with management’s view on each
• Internal control documentation (process notes, risk register, controls log) supporting the ICFR opinion where applicable
• Draft Management Representation Letter — the auditor will give the format, but the schedules supporting the representations need to be ready
• Subsequent-events review file: events between year-end and audit date that may need disclosure or adjustment under SA 560

Sequence we work backwards from

Audits get done well when they are scheduled backwards from the AGM. AGM has to be held within six months of year-end (Section 96). The audited financials are adopted at the AGM. The auditor needs at least 10 days post-sign-off to file the audit-trail documents. So:

1. AGM target date — say, 30 September.
2. Board meeting to adopt accounts — at least 10 days before the AGM, so on or before 20 September.
3. Audit sign-off — ideally 7–10 days before the board meeting, so by 10–13 September.
4. Audit fieldwork — 3–4 weeks, so starting between 15 and 20 August.
5. This checklist — everything in the auditor’s hands on Day 1 of fieldwork.

That puts the “30 days before sign-off” mark in early September. The pre-audit reconciliation work has to be on the calendar of the finance team and the auditor by mid-August. Audits that miss this rhythm tend to result in queue-jumping, late nights and CARO findings that could have been pre-empted.

Sources

• Ministry of Corporate Affairs — Companies Act 2013
• ICAI — Standards on Auditing
• ICAI — Guidance Notes and Technical Guides
• Income-tax Act 1961 — Section 40(a)(ia) (disallowance for non-deduction of TDS)