Many first-time directors assume audit only applies once a company reaches a certain size. Under Nepal's Companies Act, 2063, that assumption is wrong — and can be costly.
No Turnover Threshold
Unlike jurisdictions where small businesses are exempt below a revenue threshold, Nepal applies statutory audit universally. Every registered company — private, public, foreign-invested, even a one-person company with zero transactions — must undergo audit annually.
Who Can Perform It
Only a Chartered Accountant licensed by the Institute of Chartered Accountants of Nepal (ICAN) can conduct a statutory audit. Company employees, directors, or their relatives are explicitly barred from acting as auditor for that company.
Consequences of Non-Compliance
Skipping statutory audit isn't a quiet oversight — it triggers OCR penalties, potential restrictions on corporate transactions (loans, transfers, contract bidding), and can complicate future tax filings since audited financials are often required alongside the annual return.
Even Dormant Companies
A company with no revenue or activity in a given year is still required to file audited financial statements — "dormant" is not the same as "exempt" under Nepali company law.
Company Sathi's audit team handles statutory audits for companies of every size, including dormant entities that still need to stay compliant.
