Section 143 of the Companies Act, 2013 gives the statutory auditor the right to see every book, voucher and explanation they need, and it sets out what the audit report must say. It also requires the auditor to report suspected fraud. In short: wide access, a defined report, and a duty to speak up.
Last reviewed: 17 October 2026. Facts checked. We opened a summary of section 143 on lawx.in and a Taxmann summary of sections 139, 140 and 143, and searched the web for commentary on branch audits. The India Code page returned a 403 error, so we did not read the statute directly. We did not open the Companies (Audit and Auditors) Rules, 2014, which carry the fraud-reporting amounts and timelines; those come from Taxmann and from several law-firm and practitioner summaries found by web search. The 2020 amendment to section 143(15) (₹5 lakh for a listed company, ₹1 lakh for any other) was confirmed in search-result commentary, not the Act.
This is not the Income-tax section 143. It is the Companies Act section.
1. Right of access: section 143(1)
The auditor can see the books of account and vouchers at all times, wherever they are kept. The auditor can also require information and explanations from officers. The summary we opened adds that the auditor of a holding company can access the records of its subsidiaries and associates for consolidation.
The same sub-section lists matters the auditor must inquire into:
- whether loans and advances made on security are properly secured, and whether their terms harm the company or its members;
- whether transactions shown only as book entries are prejudicial to the company;
- for companies that are not investment or banking companies, whether securities were sold below the purchase price;
- whether loans have been shown as deposits;
- whether personal expenses have been charged to revenue;
- whether cash was actually received for shares shown as allotted for cash.
2. The report: sections 143(2) to 143(4)
The auditor reports to members on the financial statements. The report says whether they give a true and fair view of the company's affairs, its profit or loss, and its cash flow.
Section 143(3) lists matters the report must also state. Ours is a plain-words version of the list as summarised:
| Matter | In plain words |
|---|---|
| Information | Whether the auditor got all information needed |
| Books | Whether proper books were kept, and branch returns were adequate |
| Branch reports | How another auditor's branch report was dealt with |
| Agreement | Whether the balance sheet and profit and loss account agree with the books |
| Standards | Whether the statements comply with accounting standards |
| Adverse transactions | Comments on transactions that may hurt the company |
| Directors | Whether any director is disqualified under section 164(2) |
| Books qualifications | Any qualifications on how accounts are maintained |
| Internal financial controls | Adequacy and operating effectiveness |
| Other matters | Anything prescribed by the Rules |
Under 143(4), if the answer to any matter is negative or qualified, the report gives reasons. Our guide to CARO 2020 covers the separate prescribed-matters statement, and SOX controls vs IFC covers the controls clause.
3. Branch audit: section 143(8)
A branch can be audited by the company's auditor or by another qualified person. For a foreign branch, a locally qualified person can audit. The branch auditor reports to the company's auditor, who deals with the report as considered necessary. A web search result pointed to Rule 12, which extends the section 143 powers to branches. We did not open Rule 12.
4. Standards and extra statements
The auditor must comply with auditing standards under 143(9). Standards come from ICAI until the Central Government prescribes others on the advice of NFRA. The Central Government can also require additional statements for specified classes of company.
5. Fraud reporting: section 143(12)
If the auditor has reason to believe officers or employees are committing an offence involving fraud against the company, the auditor reports it. Frauds involving less than ₹1 crore go to the audit committee or Board. Frauds of ₹1 crore or more go to the Central Government on Form ADT-4. The amount and process are in Rule 13 of the Companies (Audit and Auditors) Rules, 2014, which we saw only through secondary summaries.
Under the Rule, as the summaries describe it, the auditor first reports to the Board or audit committee immediately and no later than two days after learning of the fraud, and asks for a reply within 45 days. The auditor then forwards the report, the reply and comments to the Central Government within 15 days of the reply, or of the 45 days running out. Some summaries compress this into a 60-day window; check Rule 13 for the exact counting. Good-faith reporting does not breach the auditor's other duties (143(13)). Failing to report carries a penalty of ₹5 lakh for a listed company and ₹1 lakh for any other company (143(15)). For the process, read our section 143(12) fraud reporting deep dive.
6. Other professionals
Section 143(14) applies these provisions with necessary changes to cost accountants doing cost audits and to company secretaries in practice doing secretarial audits.
An engagement checklist
- Record the access you asked for and what you got.
- Log refusals of information, and state them in the report.
- Answer each 143(1) inquiry in a working paper.
- Map every 143(3) clause to a place in your file.
- Decide early who handles branch audits.
- Set a fraud escalation route before fieldwork starts.
Frequently Asked Questions
Can management refuse to give the auditor a document?
Section 143(1) gives a right of access at all times. If access is refused, the issue goes into the work and the report.
Does the auditor have to report on internal financial controls?
Yes. Section 143(3)(i) asks for the adequacy and operating effectiveness of internal financial controls.
Who audits a branch?
The company's auditor or another qualified person. A foreign branch can be audited by a locally qualified person.
What is the penalty for not reporting fraud?
₹5 lakh for listed companies and ₹1 lakh for others, under 143(15) as summarised.
Is the auditor protected when reporting fraud?
Good-faith reporting is not a breach of any auditor duty, under 143(13).
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