Summary
- Private companies in India must now comply with mandatory internal audit requirements if they meet specific thresholds under Section 138 of the Companies Act, 2013.
- An internal audit is legally binding for private firms with an annual turnover of ₹200 crore or more, or outstanding borrowings exceeding ₹100 crore.
- The law allows flexibility in appointing internal auditors, who can be external professionals or in-house staff, but prohibits statutory auditors from serving concurrently as internal auditors.
- Non-compliance can lead to significant penalties and operational risks, underscoring the importance of proactive governance for growing businesses.
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