Business Consulting – Long Green

Internal Audit Applicability: Hidden Risks In 2025

CA Sansheer Sirajudheen — Tue, 22 Apr 2025 05:22:50 +0000

Internal audit applicability is often overlooked amid the whirlwind of today’s business landscape, where companies juggle financial management, regulatory compliance, stakeholder expectations, and risk mitigation. However, the reality is that neglecting the importance of internal audit applicability can lead to significant risks. At Long Green, we’re committed to shining a light on these hidden threats before they escalate into financial disasters.

This blog will explore why internal audit applicability is crucial, what it entails under the Companies Act 2013, and how businesses, both private and public, can safeguard themselves by prioritising internal audit services.

What is an Internal Audit?

An internal audit is an independent evaluation carried out within a company to examine its operations, finances, and compliance processes. Unlike a statutory audit, which is required by law and occurs annually, internal audits can be performed more regularly and are aimed at enhancing a company’s internal systems

It’s not just about crunching numbers; it’s about spotting weaknesses, boosting efficiency, and making informed decisions. The scope of internal audit extends far beyond just financial accuracy,it encompasses operational efficiency, risk assessment, and policy compliance.

Why Internal Audit Applicability Matters

Today, you might be asking, Does every company need internal audits?

The quick answer is no, but many do. Those that meet certain criteria are required to adhere to internal audit regulations as outlined in Section 138 of the Companies Act, 2013, and Rule 13 of the Companies (Accounts) Rules, 2014.

Overlooking these regulations can result in missed opportunities, compliance challenges, and even penalties. Moreover, it can compromise your adherence to internal auditing standards, which are vital for ensuring systematic, disciplined, and objective evaluations.

Who Needs to Conduct Internal Audits?

The Companies Act provides clear guidelines: Internal audits are mandatory for:

1. All listed companies,

2. Unlisted public companies that:

-Have a turnover of ₹200 crore or more

– Have a paid-up share capital of ₹50 crore or more

– Have outstanding loans of ₹100 crore or more from banks or financial institutions

– Have outstanding deposits of ₹25 crore or more

3. Private companies that:

– Have a turnover of ₹200 crore or more

– Have outstanding loans of ₹100 crore or more from banks or financial institutions

So, if your business checks any of these boxes, even if it’s just for a little while, you’re legally obligated to bring on internal auditing services.

The Hidden Risks of Skipping Internal Audits

1. Undetected Fraud and Errors

Internal audits are crucial for spotting fraud, misreporting, and human mistakes. Without them, these problems can linger unnoticed until it’s too late.

2. Penalties For Non-Compliance

Failing to meet the audit requirements set by the Companies Act can lead to fines of up to ₹2 lakh for the company and ₹50,000 for the individuals responsible.

3. Weak Risk Management

nternal audits play a key role in identifying and evaluating risks,whether they’re financial, operational, or compliance-related. Without them, you’re navigating without a map.

4. Loss of Investor Trust

Investors and stakeholders value transparency. Regular audits enhance your credibility and demonstrate that you take governance seriously.

Types of Internal Audits You Should Know

Depending on your industry and operations, you might need one or more types of internal audit services:

– Financial Audit – Ensures your financial records are accurate and complete.

– Compliance Audit – Confirms you’re adhering to relevant laws and regulations.

– Operational Audit – Evaluates the efficiency and effectiveness of your daily processes.

– Performance Audit – Reviews how well departments or teams are achieving their goals.

– IT/Technology Audit – Checks security, data privacy, and system integrity.

– Environmental Audit – Assesses your company’s environmental practices.

– Management Audit – Reviews management decisions and overall corporate strategy.

Each types of audits offers a unique perspective on your business, helping to uncover gaps and opportunities for improvement within the scope of the internal audit.

Who Can Be Appointed as an Internal Auditor?

According to the Companies Act, an internal auditor can be:

A Chartered Accountant (with or without a certificate of practice)
A Cost Accountant
Any other professional that the company’s board considers suitable
In some cases, even a qualified employee of the company

However, it’s important to note that a company’s statutory auditor cannot also serve as its internal auditor to maintain independence and objectivity.

The Appointment Process Simplified

If your company falls under the internal audit requirements, here’s a straightforward breakdown of the appointment process:

Identify Eligibility – First, check if your company meets the criteria mentioned above.
Board Approval – Schedule a board meeting to get the appointment approved.
Consent Letter – Obtain a written consent from the internal auditor.
File with ROC – Submit Form MGT-14 to the Registrar of Companies along with the board resolution.
Issue Appointment Letter – Send a formal letter to the auditor you’ve appointed.

How Long Green Can Help

At Long Green, we provide customized internal audit services, audit readiness and internal audit planning services to ensure you remain compliant, efficient, and secure.

Our team of expert consultants will:

– Assess whether your company needs to undergo internal audits

-Recommend the most suitable type and frequency of audits within the scope of the internal audit.

-Assist with documentation and audit assurance service, to ensure you follow best practices based on internal audit standards

Help you understand the benefits of internal audit and how it can create long-term value for your business

FAQ

1.Who's in charge of making sure internal audits are applicable in a company?

The responsibility falls on the company’s Board of Directors and senior management to assess and ensure that internal audits are applicable, following the guidelines set out in the Companies Act of 2013. Failing to meet these obligations can result in non-compliance and potential penalties.

2.What key internal audit standards should companies adhere to?

Companies should stick to internationally recognized internal audit standards, like those established by the Institute of Internal Auditors (IIA). These standards help maintain consistency, objectivity, and quality throughout the audit process and its reporting.

3. Can an employee of the company conduct the internal audit?

Absolutely! The Companies Act permits a qualified employee to serve as an internal auditor, as long as they remain independent from the operations being audited. However, to ensure objectivity and compliance with internal audit standards, many companies prefer to hire external professionals.

4. How does the scope of internal audit differ across various industries?

The scope of internal audit can differ quite a bit depending on the industry. For instance, a manufacturing company might concentrate on operational efficiency and inventory management, while an IT firm may focus more on data privacy, cybersecurity, and auditing tech systems.

How Finance Automation is Shaping the Business of the Future

CA Sansheer Sirajudheen — Thu, 17 Apr 2025 11:05:13 +0000

The clock ticks away.

In a world where markets change in seconds and competitors change overnight, operating a business manually is similar to navigating a storm without a compass. You may make it through, but how much will you lose?

Welcome to the age of Finance Automation, where companies are abandoning broken spreadsheets and cumbersome systems for lean, intelligent, and scalable solutions. And at the heart of it all is Long Green, driving the financial revolution.

What Exactly is Finance Automation?

Let’s break it down.

Finance automation uses advanced technology to handle routine, repetitive financial tasks. We’re talking about everything from invoice processing and payroll to tax filing, budgeting, and forecasting. It’s like having an extra set of hands, only faster, more accurate, and available 24/7.

Imagine it as your finance department’s best-kept secret. No more all-nighters reconciling figures. No more cold sweats during audits. Just tidy, accurate, up-to-the-minute financial control.

The Issue with the Traditional Approach

Honestly, manual finance is slow, aggravating, and perilously prone to errors.

A single digit is misplaced on a report. One omitted invoice. One miscalculated tax. That’s all it takes to disrupt your entire company’s books.

And still, most firms are holding onto old habits. Why? Because of habit. Due to fear of change. Or perhaps, simply because they do not realise that there’s a better option.

But beware, the companies that are going to thrive tomorrow are those that mechanise today.

Long Green: Smart Finance Starts Here

And here is where Long Green intervenes, not merely as a provider, but as an innovator.
Long Green doesn’t make blanket promises. They listen to you, learn about your workflows, your pain points, and your objectives. Then they build automation tools that truly deliver for your business.

Payroll? Automated.

Expense claims? Sorted in minutes.

Dashboards? Real-time, insightful, and crystal clear.

And the best part? You don’t have to be a tech wizard to use it. Long Green’s systems plug solutions seamlessly into your existing tools and accounts, no mess, no stress.

They’re not simply providing software. They’re providing freedom. Freedom from tedious chores. Freedom from expensive mistakes. Freedom to devote time to building your business.

Look Around,The Transformation is Already Here

Around the world, innovative businesses are already surfing the wave of finance process automation:

New technologies are making financial management simpler and more accessible than ever before.
It’s time to make your business more agile and proactive in its financial decisions

OCTA is redefining accounts receivable management, turning a time-consuming task into a seamless, efficient process for mid-sized businesses.
Pluto provides startups with an unobstructed view of their budget and expenses, all in one easy-to-use, streamlined dashboard.
CFOBridge is a virtual CFO, merging expert advice with state-of-the-art automation to enable businesses to make smarter decisions.
These innovators are a testament: Finance automation is not only the future, it’s already here.

How You Can Start Today,

You don’t have to transform your company overnight. But you must begin.

This is your four-step plan:

1. Identify the patterns

See the repeated chores that are dragging your team down. Invoices. Reports. Reimbursements

2. Choose the right partner

Select a partner who understands your business. A person like Long Green, who balances automation with in-the-trenches finance experience.

3. Prepare your team

Get your employees trained to love the tools. Make them confident enough to make the transition from paperwork to strategy thinking.

4. Monitor the results

See how your team is regaining time, your reports are becoming better, and your decisions are become unbreakable.
Automation + Humans = The Perfect Formula

Are robots going to take over accounting? Not so fast.

Finance automation takes care of the mechanics. But human judgment, insight, and leadership will never go out of style. That’s why Long Green subscribes to a “Tech + Touch” model, state-of-the-art tools backed by actual finance professionals.

Together, they don’t merely provide you with data. They provide you with clarity. Confidence and control.

Automate or Be Left Behind

The future doesn’t wait for anyone.

With the world moving faster, companies need to keep up or risk being left behind.
Automation of finance is no longer a luxury, it’s a requirement. And with trailblazers such as Long Green paving the way, the process doesn’t have to be difficult.

So here’s the question: Automate or hesitate?

Because in the business world, hesitating costs more than dollars, it costs opportunity.
Automate with Long Green. Lead with confidence. Grow without limits.

Why Businesses Need Financial Advisory Services for Long-term Success

CA Sansheer Sirajudheen — Thu, 27 Mar 2025 09:42:23 +0000

Business is not a cakewalk. With day-to-day operations to contend with, not to mention workers and customers to deal with, entrepreneurs have many hats to wear. But of all the keys to business success, perhaps one of the most important, planning finances is the most ignored or mishandled. Enter financial advisory services.

In this blog, we’ll explore why businesses need financial advisory services and how they can help companies thrive in an increasingly competitive market.

1. Strategic Financial Planning

Most companies do not fail because of insufficient customers but as a result of faulty financial planning. Without proper financial blueprints, businesses can overspend, lose control of cash flow, or fail to make wise investment choices.

Financial advisory services assist companies in developing a strategic financial blueprint that is in sync with their objectives. Advisors evaluate a firm’s existing financial position, detect possible risk areas, and offer tangible recommendations for enhancing profitability and viability.

For example, a financial advisor can assist a company in establishing realistic revenue goals, maintaining efficient expenses, and having adequate capital for long-term growth. This kind of strategic planning is crucial for success in the long run.

2. Efficient Cash Flow Management

Cash flow is the lifeblood of any enterprise. Even profitable enterprises can suffer financially if they fail to manage cash flow. A sudden decline in sales, unforeseen expenses, or delayed payments from customers can jeopardize a business.

With the assistance of financial advisory services, companies can create improved cash flow management. Advisors give recommendations on how to keep a balanced ratio of receivables and payables, maximizing expenses, and having enough liquidity to fund business operations.

They can also advise companies on borrowing loans or credit lines at the appropriate time to avoid cash flow problems. By ensuring a constant cash flow, companies can avoid cash flow crises and keep expanding.

3. Intelligent Investment Decisions

Growth in business usually involves investments,either to increase operations, introduce new products, or purchase other companies. But not all investments are profitable, and the wrong financial choice can result in losses.

A financial advisor assists businesses in assessing investment opportunities, determining possible risks, and achieving maximum returns. They perform market research, review financial viability, and offer professional advice on where and how to invest.

For instance, a small company seeking to grow globally will require advice on foreign exchange risk, tax, and regulatory issues. Financial advisory services help companies make informed investment decisions in accordance with their long-term aspirations.

4. Risk Management and Crisis Readiness

Each business confronts financial risks, market volatility, economic recession, regulation, or unpredicted crises, such as the COVID-19 pandemic. If not managed, financial losses in the billions can easily be incurred by businesses.

Financial advisors assist businesses in identifying risks and strategies to counteract them. This involves diversifying income streams, acquiring business insurance, and establishing emergency funds.

With forward-thinking risk management, businesses can limit financial losses and stay stable even amid volatile conditions. Financial advisory services serve as an insurance policy, ensuring companies survive challenges and continue to grow.

5. Tax Optimization and Compliance

Tax regulations are sophisticated and ever-evolving. Most businesses find tax planning challenging, ending up paying more than necessary or incurring penalties for failure to comply.

A financial planner makes sure companies adhere to tax rules while maximizing tax benefits. They spot lawful tax-saving methods, help in filing returns, and assist companies in planning their taxes effectively.

For example, some companies are eligible for tax credits or deductions that they aren’t even aware of. With professional financial advice, companies can legally minimize tax burdens and enhance the bottom line.

6. Improved Decision-Making through Financial Insights

Most business owners make financial decisions on instinct and not on data. Although gut feeling is part of entrepreneurship, financial decisions ought to be supported by concrete insights.

Financial advisors give companies precise financial information and analysis to inform decision-making. They produce reports, monitor key performance indicators (KPIs), and predict future trends in finances.

With this information, companies are able to realize areas of improvement, better manage resources, and establish realistic financial objectives. Financial advisory services help ensure that every business decision is informed by fact-based insights.

7. Business Expansion and Succession Planning

As companies expand, they require a well-organized financial plan to grow efficiently. Expansion necessitates money, financial reorganization, and planning in the long term. In the absence of expert advice, companies might overleverage themselves financially or lose out on opportunities for growth.

Secondly, for family businesses, succession planning is a significant but commonly overlooked factor. A financial advisor assists entrepreneurs in formulating a seamless succession plan so that future generations have continuity and stability.

Whether it’s market expansion or succession planning, financial advisory services assist companies in preparing for long-term success.

The Financial Edge

Financial advisory services bring expertise, strategic planning, and risk management to the table to help businesses succeed in today’s competitive marketplace. You can be a small business, startup, or big company, but having a financial advisor by your side can be of huge assistance.

Then, is your company ready financially for the future? If not, it may be time to find expert financial advisory services and take the reins of your company’s development. Partner with Long Green Services and guarantee a financially secure future for your business!