Every company is required to prepare financial statement for period ending 31st March every year. Such financial statement must be give a true and fair view of the state of affairs of the company and comply with the accounting standards notified by the central government under Section 133 of the Companies Act. Such financial statement must be prepared in the form and format which may prescribed for a specific type of company for a private limited company schedule VI is the appropriate form.
The expression financial statement includes following items:
- Balance Sheet
- Profit & Loss Account or Income & Expenditure Account
- Cash Flow Statement
- Statement for changes in equity, if applicable
- Explanatory notes
Applicability :- All Companies
Who can conduct the audit – Statutory audit has to be conducted by a Chartered Accountant or a firm of Chartered Accountant.
Scope of Audit – Audit of the financial record and statement of the company. Auditor is required to comply with Auditing Standards
Frequency of Audit- Yearly
Report to be made to : Members
In case auditor suspects any fraud, he must immediately report the same to the Central Government
Penal Provision
Duty to report fraud :- If any auditor does not comply the with the Central Government in case of suspected fraud he shall be punishable with fine which shall not be less than Rs. 25,000/- but which may extended to Rs. 5,00,000/-[Section 143(15)]