Direct Tax Laws & International Taxation · Tax Audit and Ethical Compliances

Tax Auditor Appointment and Audit Report Forms

Updated 5 October 2026 · Fact-checked

A tax audit must be done by an accountant, meaning a chartered accountant holding a certificate of practice. The assessee appoints the auditor, who gives an audit report plus an annexed statement of particulars in the prescribed forms. The CA digitally signs and uploads both on the e-filing portal, and the assessee then accepts them.

Understand Tax Auditor Appointment and Audit Report Forms

A tax audit is a check, by an independent professional, that the books of a business or profession are properly kept and that tax-relevant facts are correctly reported. The law requires it for assessees who cross the specified turnover, receipts or presumptive-scheme conditions. Those conditions are in the topic on applicability and due dates. This page covers the next questions: who can sign, how the appointment works, what is signed, and how it is filed.

The person who can conduct the audit is called an accountant. In the exam, read it as a chartered accountant within the meaning of the Chartered Accountants Act, 1949, holding a valid certificate of practice. A firm of chartered accountants can be appointed, but the report is signed by a member of the firm who is a CA in practice. If the assessee is a company, the auditor must also be qualified to be a company auditor under the Companies Act, 2013. So a person disqualified under that Act cannot do the tax audit of a company.

The assessee appoints the accountant. Good practice, and the Code of Ethics, expect a written engagement letter, a check of independence, and communication with the previous tax auditor if there is one. The same CA can be both statutory auditor and tax auditor. The two are separate assignments with separate reports.

The 60-audit ceiling is set under the Chartered Accountants Act, 1949 (Second Schedule, professional misconduct). It caps the number of tax audit reports a CA may sign in a financial year at 60. It applies to each CA individually. It is a professional-conduct rule, not a limit in the Income-tax Act, 2025. Exceeding it is professional misconduct.

Two documents come out of the audit. The audit report is the auditor's opinion on the books and the correctness of the particulars. The prescribed form depends on the assessee. One form is for assessees already required to get accounts audited under another law, such as a company. The other is for assessees not so required, such as a trader. The statement of particulars is the detailed annexure with the clause-wise facts: method of accounting, depreciation, payments to specified persons, TDS compliance and so on. The report is the opinion. The statement is the data the opinion covers.

Both documents are furnished electronically. The CA signs digitally and uploads them on the income-tax portal. The assessee then logs in and accepts them before filing the return. ICAI also requires a UDIN on the report. Check the exact form numbers in the Income-tax Rules, 2026 in your study material. Do not rely on old form numbers.

Key rules to remember

Who is an accountant: Accountant = chartered accountant with certificate of practice (for a company: also qualified as company auditor); A non-practising CA, a CA in employment of the assessee or a person disqualified under the Companies Act (for a company) cannot sign.
Number of audits per CA: Ceiling = 60 tax audit reports signed per CA in a financial year (Chartered Accountants Act, 1949, Second Schedule: professional misconduct); The limit applies to each CA individually. For a firm, it applies to each member partner who signs, counting the tax audits that individual signs. It counts only tax audit assignments, not other audits or certifications. It is a professional-conduct rule, so exceeding it is professional misconduct.
Which report form: Assessee already audited under another law → audit report in the form for such assessees; assessee not so audited → audit report in the other form; in both cases a statement of particulars is annexed; Decide by checking whether another law requires the accounts to be audited.
Report vs statement: Audit report = opinion; statement of particulars = clause-wise facts annexed to it; Both are needed. Neither is complete without the other.
Filing route: CA digitally signs and uploads → assessee accepts on portal → return is filed; The return of an assessee who needs a tax audit is not complete without the uploaded report.

How to solve Tax Auditor Appointment and Audit Report Forms questions

Use this order for any question on appointment, forms or filing of a tax audit report.

1Check that a tax audit is actually required for the assessee on the facts given (turnover, receipts, presumptive-scheme conditions).
2Check the signer: is the person a CA holding a certificate of practice? If the assessee is a company, is the CA qualified under the Companies Act? Check any disqualification.
3Count the audits if a limit is mentioned. Add only the tax audit reports that individual CA signs. For a firm, apply the limit to each partner who signs, by that partner's own audits. Remember that the 60 limit is a professional-conduct rule under the Chartered Accountants Act, 1949, and crossing it is professional misconduct.
4Check the appointment: who appointed the CA, was an engagement letter issued, and was the previous auditor contacted?
5Decide the form: is the assessee required to be audited under any other law? Pick the matching audit report and annex the statement of particulars.
6State the filing route: digital signature, upload by the CA, acceptance by the assessee, then return filing. Mention the due date as covered in the due-dates topic.
7Write the conclusion in provision, facts, conclusion form, naming the assessee and the CA.

Quickest way: Quick check

When to use it: Use for case-scenario MCQs, where you have about a minute per question.

Is the signer a CA with a certificate of practice (and company-qualified if the assessee is a company)?
Is the 60-audit limit crossed? Count only this CA's own tax audits. Crossing it is professional misconduct under the Chartered Accountants Act, 1949.
Is the assessee audited under another law? That decides the report form.
Has the report been uploaded by the CA and accepted by the assessee?
If a condition fails, such as a non-practising signer or no upload or acceptance, the report is invalid, so the option that says it is valid is usually wrong.

Common mistakes in Tax Auditor Appointment and Audit Report Forms

Applying the 60-audit limit to the whole firm instead of to each CA.
Students read 'CA' as 'CA firm' and count the firm's total audits.
Fix: The limit is a professional-conduct rule that applies to each CA individually. For a firm, count the tax audits each signing partner signs.
Counting all audits and certifications toward the 60 limit.
The word 'audit' is used loosely for every assignment.
Fix: Count only tax audit assignments. Statutory audits, internal audits and other certificates do not count.
Treating the audit report and the statement of particulars as the same document.
Both are signed together and uploaded together.
Fix: Remember: the report is the opinion, and the statement is the detailed clause-wise annexure. Write both in an answer.
Choosing the report form on turnover instead of on whether another law requires an audit.
Turnover decides whether a tax audit is needed, so students assume it also decides the form.
Fix: Turnover decides applicability only. The form depends on whether the assessee is audited under another law.
Allowing any CA, including a non-practising one, to sign.
Students forget the certificate of practice condition.
Fix: Always check the certificate of practice first. For a company, also check Companies Act qualification.
Stopping the filing steps at the CA's upload.
Students forget that the assessee has a role.
Fix: Write the full chain: CA uploads with a digital signature, assessee accepts on the portal, then the return is filed.

Worked examples

Example 1

CA Meera, a sole practitioner with a certificate of practice, has already signed 58 tax audit reports this financial year. She also has 15 statutory audits and 10 other certification assignments. A client with turnover above the tax audit limit offers her 4 more tax audits. How many can she accept?

Show the solution

Provision: under the Chartered Accountants Act, 1949 (Second Schedule), a CA can sign at most 60 tax audit reports in a financial year without committing professional misconduct. The limit is counted for each CA individually.
Facts: only tax audits count, so the count is 58. The 15 statutory audits and 10 certifications are ignored.
Remaining room: 60 − 58 = 2.
Conclusion: she can accept only 2 of the 4. Accepting all 4 takes her to 62 and exceeds the limit, which amounts to professional misconduct.

Answer: She can accept 2 more tax audits. The statutory audits and certifications are not counted.

Example 2

Alpha Ltd is audited under the Companies Act, 2013 and also needs a tax audit. Ravi, a trader whose turnover crosses the tax audit limit, has no audit requirement under any other law. State which form of audit report applies to each and how the reports are filed.

Show the solution

Provision: the form of audit report depends on whether the assessee is already required to be audited under another law. In both cases a statement of particulars is annexed.
Alpha Ltd: required to be audited under the Companies Act, so the audit report in the form for such assessees applies. The tax auditor refers to the statutory audit and reports on the tax particulars. The auditor must be qualified under the Companies Act.
Ravi: not audited under any other law, so the audit report in the other form applies. The tax auditor reports directly on the books and the particulars.
Filing for both: the CA signs digitally and uploads the report and statement on the portal. Alpha Ltd and Ravi then accept them before filing their returns.
Conclusion: the form differs, but the statement of particulars and the e-filing route are the same.

Answer: Alpha Ltd uses the report form for assessees audited under another law. Ravi uses the report form for assessees not so audited. Both annex the statement of particulars, and both reports are uploaded by the CA and accepted by the assessee.

Exam tips

Case MCQs often hide the trap in one line: a non-practising CA, a count of audits, or a disqualified auditor of a company. Read the facts for that line.
In written answers, use provision, facts, conclusion form. State the rule, apply it to the names and numbers given, and conclude.
Always write that the statement of particulars is annexed to the report. Many students lose a mark by naming only the report.
When counting audits, list what you include and what you ignore. This shows the method even if the final count is disputed.
Link this topic to the due dates and the clauses of the report. A strong answer mentions the filing date and the digital upload step.

Practice questions from Tax Audit and Ethical Compliances

Tax Auditor Appointment and Audit Report Forms in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Tax Auditor Appointment and Audit Report Forms: frequently asked questions

Who can be a tax auditor under the Income-tax Act, 2025?

Only an accountant, meaning a chartered accountant holding a certificate of practice. If the assessee is a company, the CA must also be qualified to be a company auditor under the Companies Act, 2013. A firm of CAs can be appointed, but a CA signs the report.

What is the limit on the number of tax audits per CA?

The Chartered Accountants Act, 1949 (Second Schedule, professional misconduct) sets the ceiling at 60 tax audit reports a CA may sign in a financial year. The limit applies to each CA individually. For a firm, it applies to each member partner who signs, counting that partner's own tax audits. Only tax audit assignments are counted, not other audits or certificates. Exceeding it is professional misconduct.

What is the difference between the audit report and the statement of particulars?

The audit report is the auditor's opinion on the books and the correctness of the particulars. The statement of particulars is the annexure that gives the detailed clause-wise information. Both are prescribed and both are filed together.

How is the tax audit report filed?

The CA signs the report and statement digitally and uploads them on the income-tax portal. The assessee then logs in and accepts them. This must be done by the due date before the return is filed. ICAI also requires a UDIN on the report.

Can the statutory auditor also be the tax auditor?

Yes, the same CA can do both, subject to the qualification and ethical limits. The two are separate assignments with separate reports. For a company, the CA must be qualified under the Companies Act.