"Audit" gets used loosely, but Nepal's business environment involves several distinct types, each with different legal status and purpose.
Statutory Audit
Legally mandated for every registered company under the Companies Act, 2063. Conducted by an independent, ICAN-licensed external auditor, and the report goes to shareholders and regulators. This is the one every company must have, without exception.
Internal Audit
Voluntary (though recommended, and effectively expected for larger/public companies as governance best practice). Performed by internal staff or engaged consultants, focused on operational efficiency and internal controls rather than a formal opinion on financial statements. Reports go to management, not regulators.
Tax Audit
Focuses specifically on verifying compliance with the Income Tax Act, 2058 — correct calculation of taxable income, deductions, and TDS. The IRD may conduct its own tax audit independent of your statutory audit, to verify the accuracy of tax payments specifically.
Forensic & Special Audits
Ordered by OCR or a court under Section 117 when there are allegations of fraud or mismanagement — a different animal entirely from routine annual compliance.
Bottom Line
Every company needs statutory audit annually; internal and tax audits serve different, complementary purposes depending on your size and risk profile.
Company Sathi provides statutory audit and can advise on when internal audit adds real value for your business.
