What is a Statutory Audit for Holding Company?

Statutory audit for a holding company is the yearly check of its accounts by an independent practising Chartered Accountant (CA), as required by the Companies Act, 2013. A holding company is a company that controls another company, called its subsidiary. It does this by holding more than 50% of the voting power or by controlling the company’s Board of Directors.

A holding company has more audit work than a normal company. The auditor checks the accounts of the holding company alone and also the combined accounts of the whole group.

Key Points About Holding Company Audit:

• Audit is compulsory every year
• Two sets of opinions are given
• The auditor can access the records of subsidiaries
• Intra-group dealings are checked
• Investments in subsidiaries are reviewed
• Related party transactions are checked
• Small company relief is not available
• Subsidiaries are audited separately

Is Statutory Audit Compulsory for a Holding Company?

Yes. A holding company must get its accounts audited every year by a practising Chartered Accountant (CA), like every other company under the Companies Act, 2013. But a holding company has extra work. Along with its own (standalone) accounts, it generally has to prepare consolidated financial statements, which combine the accounts of the holding company with those of its subsidiaries, associates and joint ventures. The statutory auditor must audit and report on both sets of accounts.

A holding company also cannot take the benefit of the small company relief, since the law excludes holding and subsidiary companies from that category.

CA Arpit Gupta helps groups and growing business families with the audit of holding companies, consolidation support, ROC filings and group compliance.

What Documents Are Needed for the Audit of a Holding Company?

For the holding company:

• Certificate of Incorporation, MOA and AOA
• Trial balance, ledgers and bank statements
• Sales, purchase and expense records
• Fixed asset register
• Loan statements and agreements
• Tax returns and statutory compliance records
• Minutes of Board and general meetings
• Registers of members, directors, investments and loans

For the group:

• List of subsidiaries, associates and joint ventures with the shareholding
• Share certificates and investment records
• Audited or draft accounts of each subsidiary, associate and joint venture
• Intra-group balance and transaction statements, and confirmations
• Loan and guarantee agreements between group companies
• Details of related party transactions and approvals
• Accounting policies and differences between group companies
• Acquisition papers and valuation reports for goodwill
• Reports of other auditors and their audit instructions
• Foreign subsidiary accounts and exchange rates, where applicable
• Previous year's consolidated accounts and Form AOC-1

How Does Our Audit Process Work?

1. Call or WhatsApp us
2. Tell us about your group
3. We check the reporting needs
4. We confirm our independence and share the proposal and fee
5. The auditor is appointed with consent, eligibility certificate and Form ADT-1
6. We plan the group audit
7. We audit the standalone accounts of the holding company
8. We review the subsidiaries' accounts
9. We check the consolidation
10. We finalise the reports
11. We help with the AGM papers
12. We remind you about the next due dates

Why Choose CA Arpit Gupta for Holding Company Audit?

• Practising Chartered Accountant
• We look at the entire group, not only the holding company
• Consolidation support
• Complete ROC support
• Related party and transfer pricing guidance
• Help with old defaults
• Honest and early feedback
• Easy contact

Get Your Group Audit Done Right

A holding company's audit is bigger than a single company's audit. Share your group structure with CA Arpit Gupta, and we will plan and complete your standalone and consolidated audit and the filings that go with it.

Call or WhatsApp CA Arpit Gupta at: +91-7081220600.