News of Removing Statutory Audit for Companies with Turnover Up to Rs 1 Crore Is Fake: Claims CA

A recent news circulating on social media platforms claims that the Company Law Committee has recommended ending the statutory audit requirement for companies having a turnover of Rs 1 crore. However, in a recent post on Platform X, a chartered Accountant has claimed that this news is false and misleading.

He clarified that the Corporate Laws (Amendment) Bill, 2025, is listed for the Winter Session of Parliament to amend the Companies Act, 2013 and LLP Act 2008. While it is based on the Company Law Committee’s 2022 Report, this Report does not include any proposal for removing the statutory audit requirement for small companies.

No – the Company Law Committee has NOT recommended scrapping statutory audit for companies with turnover up to ₹1 crore.

A lot of CAs & professionals have circulated this since yesterday, so I dug deeper.

Here’s the factual position 👇

🔹 “The Corporate Laws (Amendment) Bill,… pic.twitter.com/HrPDbGlNcb

— CA Avinash Kumar Rao (@theavinashrao) November 26, 2025

The CA provided the actual recommendations that were made by the committee. These were as follows:

• Introducing penalties for auditor resignation disclosures.
• Restricting non-audit services for certain companies.
• Encouraging the government to mandate joint audits.
• Strengthening NFRA’s powers and increasing penalties for audit-related violations.
• Standardising the impact statement for qualification, reservation, or adverse remark in the auditor’s report.

The CA also urged the Institute of Chartered Accountants of India (ICAI) to investigate the source of this information and make a fair, data-based representation, because the step to remove the audit requirement for small companies can significantly affect the tax laws, banks, and regulatory oversight and result in higher fraud and may lower the confidence of stakeholders.