Internal Audit
Quick Reference for Your Business
Section 138 Companies Act – Who Must Appoint • What It Covers • Penalties
01
Who Must Appoint An Internal Auditor
| Company type | Trigger (preceding FY) |
|---|---|
| Listed company | Always mandatory |
| Unlisted public | Any one: turnover ≥ ₹200 cr • paid-up capital ≥ ₹50 cr • borrowings > ₹100 cr • deposits ≥ ₹25 cr |
| Private company | Turnover ≥ ₹200 cr OR borrowings > ₹100 cr |
| LLP / proprietorship / firm | Not covered by Section 138 |
02
What Internal Audit Covers
Internal Controls
and process effectiveness
Risk Management
and fraud-prevention checks
Compliance
with laws and internal policies
Operational Efficiency
and cost leakages
Reports to the Board / Audit Committee
03
Penalty for Default
Section 450 (general penalty)
₹10,000
plus ₹1,000 per day of continuing default, on the company and officers in default.
Note: The internal auditor can be a CA, Cost Accountant or other professional approved by the Board — but the statutory auditor cannot also be the internal auditor (Section 144). Even where not mandatory, internal audit strengthens controls and boosts lender and investor confidence.
04
Why Clients Trust M/s Durganjali & Associates
A real, qualified Chartered Accountant
A practising CA who runs a risk-based internal audit that genuinely strengthens your controls.
Audits that hold up
Proper working papers and documentation that stand up to regulators, banks and the department.
Deadlines never missed
We track every due date so penalties never catch you off guard.
Clear updates in your language
Simple updates in Telugu and English — you always know where things stand.
Honest, practical advice
Straight answers you can act on — no jargon, no overselling.
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