1. Section 138(1) of Companies Act, 2013
The following class of companies shall be required to appoint an internal auditor-
An internal Auditor can be an Individual or a Partnership firm or a body corporate.
a. Every listed company;
b. Every unlisted public company having-
i. paid up share capital 50 Cr. or more during the preceding financial year;
ii. Turnover of 200 Cr. more during the preceding financial year; or
iii. outstanding loans or borrowings from banks or public financial institutions exceeding 100 Cr. or more at any point of time during the last financial year,
iv. outstanding deposit of 25 crore or more at any point of time during the preceding financial year;
c. Every private company having-
i. Turnover of 200 crore or more during the preceding financial year;
ii. Outstanding loans or borrowings from banks, PFIs, exceeding 100 Crore or more at any point of time during the preceding financial year.
2. Who can be Internal Auditor?
Internal Auditor shall either be a Chartered Accountant or a Cost Accountant or such other professional as may be decided by Board to conduct internal Audit of the functions and activities of the Company.
3. CG can make report
The, CG may, by rules prescribe the manner and intervals in which the internal audit shall be conducted and reported to the Board.
4. Internal Audit on IFSC
Section 138 of the Companies Act, 2013 shall apply if Article of Association of the Company provides for the same.
5. Rule 13(2)
The Audit Committee of the Company or Board shall in consultation with internal Auditor formulate the scope, functioning, periodicity and methodology for conduct of the internal Auditor.
6. Applicability of some provisions
The provisions of section 141, 142, 143 regarding Qualifications, duties, Reporting shall mutatis Mutandis apply in case of Internal Auditor.