Internal Audit is a Compliance test that has been mandated by Section 138 of the Companies Act, 2013 upon the Companies which come under the purview of prescribed thresholds.
The said companies have to perform the internal audit checks regularly to ensure that they are not deviating from any material compliance instructed by any regulatory or governing body. The said companies are required to appoint a person as an Internal Auditor. Section 138 describes that a Chartered Accountant, a Cost Accountant, or any other professional as may be decided by the Board can be appointed as an Internal Auditor. Thus we can see that the Companies Act has widened the scope of professionals in this segment. So with the Companies Act 2013, professionals such as Chartered Accountants, Cost Accountants, Company Secretaries, Advocates and the like can be appointed as Internal Auditors. Thus it is a segment where such professionals can secure a lucrative career.
The internal audit is done by checking whether the company has complied with all the applicable laws and thereafter a report is prepared by the Internal Auditor stating the compliance’s and material deviations if any.