Statutory Audit 2026: A Complete Preparation Checklist for Company Boards & Management

A statutory audit feels like the auditor's job — but in practice the auditor can only move as fast as your books, schedules and approvals allow, and the filing obligations are squarely the company's. This guide is the end-to-end checklist we run with boards and founders across Delhi NCR so that no compliance, no form, no Companies Act provision and no accounting-standard applicability gets missed.

First, confirm what applies to you

Four facts about your company drive almost everything below — fix them before anything else:

• Are you listed, unlisted public, private, or OPC? (Drives rotation, internal financial controls, secretarial audit.)
• What are your net worth, paid-up capital, turnover and borrowings for FY 2025-26 and the preceding year? (Drives Ind AS vs AS, CARO exemption, internal audit, cost audit, certification of the annual return.)
• Do you have any subsidiary, associate or joint venture? (Drives consolidation, AOC-1 and consolidated CARO.)
• Are you a "small company" under Section 2(85) — paid-up up to ₹4 crore and turnover up to ₹40 crore? Small companies get relief on CARO, rotation, internal audit, cash-flow statement and board-meeting frequency — but they still need a statutory audit and still file AOC-4 and MGT-7A.

The FY 2025-26 audit & filing calendar at a glance

Assuming a 31 March 2026 year-end and the AGM on the last permissible day (30 September 2026):

Sequencing trap: MGT-7 can only be filed after AOC-4 is accepted, and the MCA-21 V3 portal won't let you file FY 2025-26 if a prior year is still pending — clear any backlog oldest-first. See our full ROC annual compliance calendar for every form and penalty.

Step 1 — Pre-audit readiness (management & finance team)

This is where most audit delays come from. Finish it before fieldwork starts.

A. Books of account & closing (Sec 128)

• All FY 2025-26 transactions recorded; cut-off respected at the year-end.
• Books kept on accounting software with an audit trail (edit log) that was switched on and operated throughout the year — mandatory since 1 April 2023, and the auditor must report on it under Rule 11(g).
• Records retained and accessible (minimum 8 years).
• Trial balance finalised and frozen for audit.

B. Reconciliations (auditors ask for these first)

• Bank reconciliations for every account, including closed/dormant ones, as at 31 March 2026.
• GST reconciliation: books vs GSTR-1 vs GSTR-3B vs GSTR-2B; ITC and RCM checked.
• TDS/TCS reconciliation: books vs Form 26AS/TRACES; challans deposited; returns filed.
• Inter-company / related-party balances confirmed both sides.
• Statutory dues (PF, ESI, PT, GST, TDS, advance tax) reconciled and paid; arrears listed with periods.
• Vendor and customer balance confirmations initiated.

C. Schedules & supporting documents

• Fixed asset register updated; depreciation as per Schedule II; physical verification done with discrepancies recorded.
• Title deeds of all immovable property held in the company's name (a CARO point).
• Inventory count sheets, valuation basis, and slow/non-moving provision.
• Trade receivables ageing and expected-credit-loss / bad-debt provision.
• Loans & advances schedule (check Sec 185/186 for loans to directors/related parties).
• Borrowings schedule with sanction letters; where working-capital limits exceed ₹5 crore, the quarterly returns/stock statements filed with banks must reconcile to the books.
• Provisions, contingent liabilities and a litigation summary.

D. Governance & registers

• Minutes of all board and committee meetings for the year.
• MBP-1 (directors' interest) and DIR-8 (non-disqualification) on file.
• Statutory registers updated, including the related-party register under Sec 189.
• All charges (CHG-1/CHG-4) created or satisfied during the year are filed; BEN-2 updated for any change in significant beneficial ownership.

Step 2 — Get your applicability right (so no provision or standard is missed)

Run your company against every row — this is the part boards most often under-do.

Which accounting standards apply?

Once Ind AS becomes applicable it is permanent — you cannot revert even if you later fall below the threshold. Net worth is tested on standalone audited accounts.

Which audits and reports additionally apply?

Step 3 — During the audit: what management must furnish

• Prior-year signed financials, audit report, tax returns and assessment status.
• Complete trial balance, ledgers and all the schedules and reconciliations from Step 1.
• Access to the accounting software's audit-trail/edit-log report for Rule 11(g) testing.
• Bank statements, confirmations, FD certificates and loan statements.
• Board/committee minutes and statutory registers.
• Related-party transaction details and Section 188 approvals (feeds AOC-2).
• Details for the auditor's Rule 11 reporting: end-use of borrowed funds / share premium and ultimate beneficiaries (Rule 11(e)), dividend compliance with Sec 123 (Rule 11(f)), and the audit trail (Rule 11(g)).
• A signed Management Representation Letter, plus the going-concern and subsequent-events assessment.

Step 4 — Financial statements & Schedule III disclosures

The 2021 Schedule III amendments added disclosures auditors now check specifically. Confirm your financials include, where applicable:

• Ageing schedules for trade receivables, trade payables, capital work-in-progress and intangibles under development.
• Promoter shareholding and changes during the year.
• Title deeds of immovable property not held in the company's name.
• Reconciliation with quarterly returns filed with banks (where borrowing against current assets).
• Specified ratios with explanations for variances above 25%.
• Disclosures on CSR, crypto/virtual currency, undisclosed income, benami property, dealings with struck-off companies, loans to/from related parties, and the number-of-layers rule.
• Cash-flow statement (not required for an OPC, small company or dormant company).

Step 5 — Board approval & AGM

• Board meeting to approve the audited financials and Board's report and to take the auditor's report on record.
• Board's Report (Sec 134) with all annexures: Directors' Responsibility Statement, AOC-2 (related-party transactions), particulars of loans/guarantees/investments (Sec 186), CSR report (if applicable), secretarial audit report MR-3 (if applicable), and the annual-return web-link.
• Financials signed as required, and the auditor generates the UDIN on the audit report.
• AGM notice with 21 clear days' notice; AGM held by 30 September 2026 where members adopt the financials, declare any dividend, and appoint/re-appoint the auditor.
• AGM minutes and resolutions recorded. (Not holding the AGM on time is an offence under Sec 99.)

Step 6 — The post-audit ROC filing chain (so no form is missed)

Don't forget the adjacent filings

• Tax audit (Sec 44AB, Income-tax Act): if turnover/receipts cross the threshold — Forms 3CA/3CB and 3CD. Separate from the statutory audit. See who needs a tax audit.
• GST annual return & reconciliation: GSTR-9 / GSTR-9C where applicable — track it on our GST & TDS compliance calendar.
• The company's income tax return for AY 2026-27.
• Cost audit / secretarial audit filings (CRA-4 / MR-3) if applicable per Step 2.

Penalties for getting it wrong

• AOC-4 / MGT-7 late filing: ₹100 per day, per form, with no cap.
• Three consecutive years of default: director disqualification under Sec 164 and possible strike-off.
• No AGM: fine up to ₹1 lakh on the company and officers in default (Sec 99).
• ADT-1 late: per-day additional fee.
• Secretarial audit default: up to ₹2 lakh per defaulter (Sec 204(4)).

The five mistakes we see most often

• Treating "small company" as "no audit." Statutory audit applies to every company; only the reliefs differ.
• Audit trail switched on mid-year — an instant reportable exception under Rule 11(g).
• Missing the applicability matrix — discovering CARO, IFC, internal audit or consolidation applies only after the auditor flags it.
• AGM held late, which silently breaches every downstream filing deadline.
• Bank quarterly returns not reconciled to books where borrowing against current assets — a common CARO qualification.

How Startup Advisory Can Help

Startup Advisory is a CA-led firm in Saket, New Delhi that takes companies across Delhi NCR through the statutory audit end-to-end — so you are ready, compliant and filed on time:

• Audit-ready bookkeeping with a compliant audit trail, clean reconciliations and complete schedules.
• An applicability review — CARO, Ind AS vs AS, internal/cost/secretarial audit and consolidation — so nothing is discovered late.
• Board's report, AGM and the full ROC filing chain (ADT-1, AOC-4, MGT-7) filed correctly and on time.
• A named Chartered Accountant who owns the timeline with you — supported by our Virtual CFO service where you need ongoing finance leadership.

Call 9311972982 or book a free consultation to get your FY 2025-26 audit on track.

This article is general information, not professional advice. Thresholds, forms and due dates are set by the MCA / Government of India and can change — confirm the current position for your company's specific facts with a Chartered Accountant before acting.