Service
Internal Financial Controls (IFC / ICFR)
Design, documentation and testing of internal financial controls over financial reporting so the control framework works in practice, not just on paper.
Section 134 and Section 143 of the Companies Act 2013 expect directors and auditors to speak to the adequacy and operating effectiveness of internal financial controls. We help management build that framework and test it the way an auditor would.
What is included
- 1st
Process narratives & flowcharts
Documentation of order-to-cash, procure-to-pay, inventory, fixed assets, payroll, treasury and financial-statement-close processes.
- 2nd
Risk & control matrix (RCM)
Mapping of risks to controls with control owners, frequency, evidence and the financial-statement assertions each control addresses.
- 3rd
Control testing
Design and operating-effectiveness testing of manual, IT-dependent and automated controls, including IT general controls (ITGC) and entity-level controls.
- 4th
Remediation roadmap
Gap register with owners and timelines; re-testing after fixes; readiness for the statutory auditor's ICFR opinion.
- 5th
Collections & receivables process review
Appraisal of systems and controls over customer collections, credit limits, dunning and reconciliation.
How the work runs
Scope
Agree the significant accounts, processes and locations.
Document & test
Walkthroughs, RCM build-out, sample-based testing with evidence.
Fix & re-test
Practical remediation plan followed by verification.
Who this is for
- Companies preparing for their first ICFR opinion
- Groups standardising controls across entities
- Businesses after a fraud, error or system change
Related questions
Yes. Every company incorporated under the Companies Act 2013, whatever its size or turnover, must have its annual financial statements audited by a Chartered Accountant. The size-based thresholds people often quote apply to tax audit, not statutory audit. LLPs need an audit when turnover exceeds ₹40 lakh or partner contribution exceeds ₹25 lakh.
A tax audit under the Income-tax Act is required for a business whose turnover exceeds ₹1 crore in the tax year, or ₹10 crore where cash receipts and cash payments are each within 5% of the total. For a profession the threshold is gross receipts above ₹50 lakh. Taxpayers under presumptive schemes who declare lower income than the presumptive rate may also need an audit.
A statutory audit is an independent opinion on whether the financial statements give a true and fair view, required by law and addressed to shareholders. An internal audit is commissioned by management or the board to evaluate operations, risk management and internal controls, and its output is recommendations rather than an opinion.
Typically: the trial balance and ledgers, bank statements and reconciliations, sales and purchase registers, fixed-asset register, inventory records and valuation, loan agreements and confirmations, statutory registers and board minutes, tax returns and challans, and the previous year's audited statements. We send a tailored checklist after the planning meeting.
Talk to us
Talk to us about internal controls & icfr
A short call is usually enough to understand the scope and suggest the right approach. In person at Kalyan Nagar, by video or by phone.