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Types of Audit in India: 12 Audits Explained with Examples

Explore the 12 major types of audit in India, including statutory audit, internal audit, tax audit, cost audit, forensic audit, and management audit. Understand their meaning, purpose, applicability, and practical examples to see how each audit works in real business situations. This guide helps CA students, finance professionals, and business owners understand audit requirements and their importance in ensuring accuracy, compliance, and transparency.

16 October, 2026

Ask ten people what an audit is and most will say, "a CA checks the company's accounts." That is only one type. A bank sends a CA to count stock in a factory. A cement company calls a Cost Accountant to check its production costs. CAG checks how the government spent your tax money. All of these are audits.

In this article, we look at the 12 types of audit you will actually come across in India, who asks for each one, and who does it.

Types of audit: master table

The easiest way to understand the types of audit is to ask two questions. Who wants this audit? And who is allowed to do it?

#	Audit	Who asks for it	Who does it	In articleship
1	Statutory audit	Companies Act, Sections 139 and 143	Practising CA	Very common
2	Tax audit	Income Tax Act (Section 44AB, now Section 63)	Practising CA	Very common
3	Bank branch audit	RBI, after every 31 March closing	CA firms on the bank's panel	Very common in April
4	Stock audit	Banks that lend against stock	CA firms	Common
5	Concurrent audit	Banks, under RBI guidelines	CA firms	Common
6	Internal audit	Section 138 for larger companies, others by choice	CA firm or in house team	Common
7	Cost audit	Section 148, for specified industries	Cost Accountant (CMA)	Not a CA job
8	Secretarial audit	Section 204, for listed and large companies	Practising Company Secretary	Not a CA job
9	Government audit	The Constitution, through CAG	CAG's officers	Rare
10	Forensic audit	Board, bank or regulator when fraud is suspected	Forensic specialists	Sometimes
11	Due diligence	A buyer or investor before a deal	CA firms	Sometimes
12	Information systems audit	Clients and regulators	IT audit specialists	Sometimes

Statutory, tax, bank branch, cost, secretarial and government audits are required by law. Internal audit is required only for some companies. The rest are asked for by banks, investors or the management itself.

A quick real life picture of a stock audit: a textile unit in Surat takes a cash credit loan of ₹5 crore against its stock. Every year, the bank sends a CA firm to visit the godown, count the stock and check that the unit is not borrowing more than its stock supports.

Types of auditor Auditors can be grouped by whom they report to:

External auditors are outsiders and must be independent of the company. Statutory, tax, cost and secretarial auditors fall here.
Internal auditors can be employees or an outside firm. They report to the management or the audit committee, not the shareholders.
Government auditors work under CAG and check the accounts of government departments and many government companies.

The qualification also decides the job. Statutory and tax audits need a practising CA. Cost audit needs a Cost Accountant. Secretarial audit needs a Company Secretary in practice.

Open the annual report of any large listed cement company and you will usually find all three named: a CA firm as statutory auditor, a Cost Accountant as cost auditor, and a Company Secretary as secretarial auditor. One company, three different auditors, three different reports.

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Types of audit by CAG

The Comptroller and Auditor General of India (CAG) gets its powers from Articles 148 to 151 of the Constitution. It does three main types of audit:

Financial audit: Are the government's accounts correct and complete? This is like a statutory audit, but for a ministry or a state.
Compliance audit: Were the rules followed? For example, was a contract given without a proper tender?
Performance audit: Did the money actually achieve its purpose? If a scheme spent crores on building school toilets, were they built, and are children using them?

The best known example is the 2G spectrum report of 2010. It was a performance audit, and CAG estimated a presumptive loss of ₹1.76 lakh crore from the way licences were given. That one report shaped national politics for years.

CAG also appoints the statutory auditors of government companies like ONGC under Section 139(5), and can run a supplementary audit of those companies under Section 143(6).

Types of audit report

Every audit ends in a report, and each type of audit has its own:

Statutory audit: Independent Auditor's Report, with CARO and IFC annexures where they apply
Tax audit: Form 3CA or 3CB with Form 3CD
Cost audit: Form CRA-3
Secretarial audit: Form MR-3
Stock and concurrent audits: in the format the bank gives

The statutory audit report can carry one of four opinions: unmodified (clean), qualified, adverse or a disclaimer. Our separate guide on the audit report format explains each one with examples.

Download PDF

12 Types of Audit Master Sheet

This one page PDF has the master table of all 12 audits, the auditor for each, and the report form it ends in. Keep it handy for quick revision before exams or before your first audit assignment.

FAQs

How many types of audit are there?

There is no fixed number in law. Audits can be grouped by law (compulsory or voluntary), by who does them (external or internal), or by timing (yearly or continuous, like concurrent audit). In practice, the 12 in the table above cover almost everything you will see in India.

What are the types of audit risk?

Audit risk is the risk of the auditor giving the wrong opinion. It has three parts. Inherent risk: the item is naturally prone to mistakes, like cash in a busy retail store. Control risk: the company's own checks fail, like one person both collecting and recording cash. Detection risk: the auditor's tests miss the mistake.

What are the types of audit evidence?

Under SA 500, the main ones are inspecting documents, observing a process, asking questions, getting confirmations from outsiders like banks, recalculating, reperforming a control, and analytical procedures like comparing this year's margins with last year's.

What are the types of audit procedures?

Risk assessment procedures help the auditor understand the business. Tests of controls check whether the company's checks work. Substantive procedures check the actual numbers, like verifying a ₹10 lakh purchase bill against the goods received.