What is the Applicability of the internal audit procedure?

A private Limited Company (Pvt.Ltd) are applicable for internal audit procedures when at some point of time during the financial year, they have outstanding loans or have borrowed from other banks or may be from other financial organizations in that case the internal audit procedure is held. The Applicability of the internal audit procedure can also be held fi the Pvt Ltd Company have a turnover of 100 crore or may be more during the foregoing financial year. An Internal audit procedure refers to the inspection of its books of account to guarantee that they are correct. An auditor is appointed to supervise the audit. The aim of an audit of the Pvt Ltd Company is to allow the auditor to express his or her point of view. In the procedure of an internal audit, the auditor will have to check various books of accounts, vouchers slips and bills or invoices to check if they are accurately and properly maintained. Internal Audits are mostly done to check the status of the company’s finances and examine its operational effectiveness. The internal audit helps the internal management to make required changes to increase the efficiency in their operations of the Company.

Difference Between a Partnership Company And a Pvt Ltd Company

The vital difference between the Pvt Ltd Company and Partnership Company is that there is no minimum capital requirement for starting a partnership company and to start a Pvt. Ltd Company minimum Rs. 1 lakh is required to begin.A Partnership Company has no separate identity from its partners, whereas a Private Ltd Company has a separate establishment to own assets in its name. Registration of the private limited company is mandatory to set up a business. Whereas in case of a Partnership company both the registered and unregistered partnerships are legal. A Pvt.Ltd company requires maximum 200 shareholders and minimum 2 to form. A Partnership Company can be formed with 2 partners and members not exceeding above 50 members. If there is any change in members or directors in a Pvt ltd. Company it does not affect the company’s existence. Formation of another partnership firm has be done in case there is any change in partner in a Partnership Firm.  Statutory audit is not applicable in case of a Partnership Firm. The tax audit can be done based on the turnover. A Pvt. Ltd company should appoint an auditor within 30 days of its formation. The ownership in a Pvt Ltd Company can be transferred easily through shares if the shareholders give their permission. In a Partnership firm the ownership is not transferable easily.