Overview

Auditing is a systematic and independent examination of financial records, operations, and systems of an organization to ensure accuracy, compliance, and transparency. It plays a vital role in validating the integrity of financial statements, enhancing stakeholder confidence, and identifying areas for operational improvement. Our auditing services encompass statutory audits, internal audits, tax audits, management audits, and special purpose audits. Each audit is conducted in line with the applicable legal and regulatory frameworks to ensure full compliance and risk mitigation. Through our structured and efficient audit processes, we help businesses detect discrepancies, improve internal controls, optimize performance, and build trust with investors, regulators, and other stakeholders.

Audit

Auditing is a systematic and independent examination of financial records, operations, and systems of an organization to ensure accuracy, compliance, and transparency. It plays a vital role in validating the integrity of financial statements, enhancing stakeholder confidence, and identifying areas for operational improvement. At Mashi Maheshwari & Co., we offer a comprehensive range of auditing services including statutory audits, internal audits, tax audits, management audits, and special purpose audits. Each audit is conducted in accordance with applicable legal and regulatory frameworks to ensure full compliance and effective risk mitigation. Our structured audit process helps businesses detect discrepancies, improve internal controls, and enhance overall financial efficiency. By providing clear insights and recommendations, we enable our clients to optimize their operations, maintain transparency, and build long-term trust with stakeholders. Our audit solutions are tailored to add value and support sustainable business growth while ensuring the highest standards of financial integrity.

We provide the following Audit Services:

• Statutory Audit - Examination of financial statements in compliance with applicable laws and regulations.
• Internal Audit - Evaluation of internal controls, risk management processes, and operational efficiency.
• Tax Audit - Audit under income tax laws to ensure proper compliance and reporting.
• Management Audit - Assessment of managerial practices, procedures, and policies to improve effectiveness.
• Special Purpose Audit - Customized audits for specific requirements such as grants, certifications, or mergers.
• Compliance Audit - Verification of adherence to statutory requirements, contracts, and internal policies.
• Internal Audit Services/Concurrent Audit - Ongoing assessment of internal controls, processes, and transactions to ensure accuracy, efficiency and compliance.
• Due Diligence Audit - In-depth financial and operational analysis typically for mergers, acquisitions, or investments.

Statutory Audit

A statutory audit is a legally mandated review of the accuracy of a company’s financial statements and related records. It is conducted to determine whether an organization provides a fair and true representation of its financial position as per the applicable financial reporting framework and legal requirements. Statutory audits are essential for maintaining transparency, building stakeholder trust, and ensuring compliance with laws and regulations such as the Companies Act, Income Tax Act, or other governing statutes. At Mashi Maheshwari & Co., we conduct statutory audits with utmost integrity and diligence, helping businesses strengthen their financial accountability and corporate governance.

Scope and Objective of Statutory Audit

The primary objective of a statutory audit is to express an independent opinion on whether the financial statements of an entity present a true and fair view of its financial performance and position in accordance with the applicable legal and regulatory framework. The audit ensures that the organization complies with statutory obligations such as the Companies Act, Income Tax Act, or other relevant laws. The scope of a statutory audit includes a thorough examination of accounting records, verification of transactions, assessment of internal controls, evaluation of financial disclosures, and identification of any material misstatements or fraud. We ensure that our statutory audits go beyond compliance by offering valuable insights into financial governance and risk management.

Objective of Statutory Audit:

• To provide an independent and professional opinion on the truth and fairness of financial statements.
• To ensure compliance with statutory and regulatory requirements (e.g., Companies Act, Income Tax Act).
• To detect and prevent errors, frauds, and misstatements in financial records.
• To strengthen the reliability of financial reporting for stakeholders and regulators.

Scope of Statutory Audit:

• Examination of books of accounts, vouchers, and supporting documents.
• Verification of compliance with applicable accounting standards and statutory laws.
• Assessment of the effectiveness of internal controls and risk management systems.
• Review of financial statements, disclosures, and audit trails.
• Identification of any inconsistencies or material misstatements.
• Reporting of audit findings along with recommendations for corrective actions.

Internal Audit

• Internal audit is a critical function within an organization that provides independent and objective evaluations of the company’s internal controls, risk management processes, and governance structures. Unlike external audits, which focus primarily on financial accuracy and statutory compliance, internal audit is more comprehensive in nature. It is designed to examine and improve the effectiveness of all aspects of an organization’s operations- including finance, compliance, IT systems, human resources, procurement, and more.
• The primary goal of internal audit is to help management identify weaknesses or inefficiencies in processes and controls, uncover potential risks, and recommend corrective actions before issues escalate. By proactively assessing internal systems and procedures, internal audit ensures that the organization operates efficiently, ethically, and in accordance with its goals and regulatory requirements.
• Our internal audit approach is risk-based and tailored to the client’s specific needs. We go beyond routine checking and focus on strategic insights that enable informed decision-making, cost optimization, and process improvement. Our auditors work closely with management teams to foster a culture of accountability, transparency, and continuous improvement, thereby strengthening the organization’s overall governance and long-term sustainability.

Scope and Objectives of Internal Audit

As per AAS-6, the internal audit function assists management in ensuring the orderly conduct of business operations, safeguarding assets, maintaining accurate financial records, and detecting fraud. The objectives vary based on organizational size and structure and typically include:

• Review of Accounting System and Internal Controls: Ensure systems are effective and suggest improvements.
• Examination of Financial and Operating Information: Evaluate processes and data for reliability and compliance.
• Evaluation of Operational Efficiency: Review resource utilization and effectiveness.
• Physical Verification: Confirm the existence and condition of assets.

The object of Internal audit can be stated as follows:

• Verify the accuracy and authenticity of financial records.
• Confirm compliance with accounting policies and procedures.
• Ensure proper authorization and control over assets.
• Validate the legitimacy of liabilities.
• Evaluate the cost-effectiveness of internal checks.
• Detect and prevent fraud.
• Review internal controls and communication discrepancies.

Internal Audit Framework

To ensure effective functioning, internal audit should follow this structured approach:

• Formal Charter: A board-approved mandate outlining audit scope and responsibilities.
• Reporting Structure: Clear, independent lines of reporting, often to the board audit committee.
• Detailed Testing: Comprehensive checks across covered areas.
• Competency: Skilled auditors with financial and non-financial expertise.
• Coordination with External Auditors: Regular interaction for collaboration and effectiveness.
• Audit Committee Involvement: Oversight on audit performance and staffing.
• Review Mechanism: Ensure compliance with procurement and disposal protocols.

Relationship Between Internal and External Audit

According to AAS-7, external auditors may rely on internal audit work to the extent it meets certain standards. While the objectives may align, the external auditor retains sole responsibility for their opinion. Coordination is essential to avoid duplication and enhance audit effectiveness.

Making Internal Audit Effective

For internal audit to be reliable for external auditors, coordination is required in:

• Planning and methodology discussions
• Sharing reports and significant findings
• Documentation and sample selection procedures

Factors considered

• Adequacy of audit programs
• Supervision and planning
• Availability of audit evidence
• Validity of conclusions
• Noteworthy internal audit disclosures

Evaluating Internal Audit Function

• When evaluating the internal audit, external auditors consider:
• Organization Status: Independence and reporting freedom
• Scope of Function: Coverage and implementation of recommendations
• Technical Competence & Professional Experience: Skills, planning, and documentation standards

Evaluation Methods

• Narrative Records: Detailed system description
• Checklists: Standardized queries for audit staff
• Internal Control Questionnaires: Comprehensive system inquiry
• Flow Charts: Graphical depiction of control procedures

Why Choose Our Internal Audit Services?

• Risk-based, objective-aligned auditing
• Global standard practices
• Added tangible value to business processes
• Supportive of corporate governance structures
• Specialization in fraud, project monitoring, IT systems, and more
• Service across industries: Manufacturing, Financial Services, IT, Healthcare, etc.

Tax Audit

Tax Audit is a statutory obligation under Section 44AB of the Income Tax Act, 1961, which requires certain categories of taxpayers to have their accounts audited by a Chartered Accountant. The intent behind this provision is to ensure transparency, accuracy, and accountability in the financial declarations made by taxpayers. Unlike statutory audits governed by company law, a tax audit is specifically oriented towards compliance with income tax provisions.

The primary purpose of a tax audit is to ascertain whether the taxpayer has maintained proper books of accounts and complied with the provisions of the Income Tax Act. It also seeks to report specific information such as compliance with TDS provisions, loans and advances, depreciation, and disallowances, among other things.

The tax audit report must be submitted in Form 3CA or 3CB (depending on whether the entity is already subject to audit under any other law) and Form 3CD, which provides detailed particulars required by the Income Tax Act.

This audit not only ensures proper presentation of the financial results of a business or profession but also aids tax authorities in streamlining the tax assessment process and reducing the scope of tax evasion.

Key Features of Our Service Tax Audit Services

Comprehensive Review of Records: We conduct a thorough examination of financial statements, tax service returns, and related documents to ensure accuracy and compliance.

Assessment of Compliance: Our audits assess adherence to service tax provisions, including correct classification of services, valuation, and timely payment of taxes.

Identification of Non-Compliance Areas: We pinpoint areas where there may be lapses or non-compliance, providing recommendations for corrective actions.

Risk Mitigation: By identifying potential issues proactively, we help clients mitigate risks associated with non-compliance, such as penalties and interest.

Expert Guidance: Our team offers expert advice on complex service tax matters, ensuring clients are well-informed and compliant.

Here's a table showing who is eligible for Tax Audit under Section 44AB of the Income Tax Act, 1961:

Why Choose Mashi Maheshwari & Co. for Service Tax Audits?

• Experienced Professionals: Our team comprises seasoned professionals with in-depth knowledge of service tax laws and audit procedures.
• Client-Centric Approach: We prioritize our clients' needs, offering personalized services tailored to their specific business requirements.
• Commitment to Excellence: We are dedicated to delivering high-quality audit services that add value to our clients' businesses.
• Continuous Support: Beyond the audit, we provide ongoing support to address any service tax-related queries or issues.