PT Pvt. Ltd., has a paid-up capital of ₹75 lakh and reserves of ₹7 crore. Over the last three consecutive financial years, immediately preceding the financial year under audit, its turnover has been ₹120 crore, ₹250 cror

Applicability of Provisions of Internal Audit: As per section 138 of the Companies Act, 2013, read with rule 13 of Companies (Audit and Auditors) Rules, 2014, every private company shall be required to appoint an internal auditor or a firm of internal auditors, having- (i) turnover of two hundred crore rupees or more during the preceding financial year; or (ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year. Also, as per section 138, the internal auditor shall either be a chartered accountant or a cost accountant (whether engaged in the practice or not), or such other professional as may be decided by the Board to conduct an internal audit of the functions and activities of the company. The internal auditor may or may not be an employee of the company. However, Statutory Auditor shall not be appointed as internal auditor of the Company. Conclusion: In the instant case, PT Pvt. Ltd, is having a turnover of ₹310 crores during the preceding financial year which is more than two hundred crore rupees. Hence, the company has the mandatorily statutory requirement to appoint an Internal Auditor and mandatorily conduct an internal audit. Therefore, the appointment of Jain and Gupta Associates (Chartered Accounting Firm) as an internal auditor of the Company is not valid as they are also its statutory auditor.