What is a Statutory Audit for Subsidiary Company?

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

A subsidiary is a separate legal company. It has its own shareholders, directors, bank accounts and tax filings. Because of this, it must have its own audit, even when the parent company is also audited.

Key Points About Subsidiary Company Audit

• Audit is compulsory
• The parent’s audit does not replace it
• Dealings with the parent are checked closely
• Group deadlines matter
• The parent’s auditor can access the subsidiary’s records
• Reports under CARO and Internal Financial Controls
• ROC filings are separate

Is Statutory Audit Compulsory for a Subsidiary Company?

Yes. A subsidiary company is a separate company in the eyes of law. It must get its own accounts audited every year by a practising Chartered Accountant (CA) under the Companies Act, 2013. Being owned by another company does not give any exemption. This is true for a wholly owned subsidiary, a partly owned subsidiary and a subsidiary of a foreign company.

A subsidiary also cannot use the small company relief, since the law excludes both holding and subsidiary companies from that category. In addition, many subsidiaries must send their accounts and reports to the parent company on a fixed schedule, so that the group can prepare its consolidated accounts.

CA Arpit Gupta helps subsidiary companies, Indian group companies and Indian arms of foreign companies with audit, group reporting support and ROC filings.

Why Does a Subsidiary Need a Separate Audit?

• Separate legal identity
• Own ROC filings
• Own tax return
• Lenders and regulators
• Group accounts depend on it
• Protection of minority shareholders

What Documents Are Needed for the Statutory Audit for Subsidiary Company?

• Certificate of Incorporation, MOA and AOA
• Details of the holding company and the ownership chain
• PAN, TAN and GST details of the company
• Trial balance and ledgers
• Bank statements and bank confirmations
• Sales, purchase and expense records
• Agreements with the parent and group companies: service, royalty, cost sharing, supply and loan agreements
• Intra-group balance statements and confirmations
• Fixed asset register and inventory records
• Loan statements and agreements
• Share capital details, allotment records and statutory registers
• GST, TDS and Income Tax records
• Payroll, PF and ESI records
• Minutes of Board and general meetings
• Related party details and approvals
• Transfer pricing documents, where applicable
• FEMA filings and RBI acknowledgements, for foreign-owned companies
• Group audit instructions and the reporting package format, if any
• Previous year's audited accounts and ROC forms

How Does Our Audit Process Work?

1. Call or WhatsApp us
2. Tell us about your company
3. We check the reports and rules that apply, including CARO, IFC and group requirements
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 audit around the group deadlines and share the document list
7. You share the books and records
8. We audit the accounts with extra checks on the group dealings and balances
9. We coordinate with the parent's auditor
10. We discuss the findings and the corrections needed
11. We finalise the Auditor's Report
12. We help with the AGM papers and the ROC filings

Why Choose CA Arpit Gupta for Subsidiary Company Audit?

• Practising Chartered Accountant
• Group-aware audit
• Careful checks on group dealings
• Foreign parent support
• Complete ROC support
• Help with old defaults
• We explain every point clearly
• Easy contact

Get Your Subsidiary Audit Done on Time

Do not let a late audit at the subsidiary hold up the whole group. Share your company details with CA Arpit Gupta, and we will plan and complete your audit and the filings.

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