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Register Right. Stay Compliant. At Business Registration Nepal, ICAN-licensed chartered accountants carry out the annual statutory audit that the Companies Act 2063 requires of every company audit in Nepal, reviewing your financial statements and issuing an independent opinion.
A statutory audit is the annual, mandatory audit, a legally required financial statement audit of a company by an independent ICAN-licensed chartered accountant under the Companies Act 2063. The statutory audit of companies applies to every private and public company in Nepal, and our ICAN-credentialed auditors conduct it alongside your annual compliance filings for the company.
A statutory audit in Nepal examines 6 areas of your company's finances before the auditor signs an opinion:
What we do in the audit of a bank follows the same scope with added banking rules. What is auditing, how an audit report reads and an audit report sample are covered in our auditing in Nepal guide.
The statutory audit rules in Nepal change with the type of entity, because each regulator adds its own requirements to the Companies Act 2063. Appointment timing, filing destinations and exemptions differ by company type, so the audit plan starts from the entity's legal form.
Private limited companies in Nepal must complete an annual statutory audit, and the auditor appointment within 6 months of incorporation is the opening obligation after company registration. A small-company exemption applies where turnover is below NPR 10 million and staff number fewer than 50, unless shareholders holding 10% or more demand an audit.
Public limited companies in Nepal have their auditor approved at the annual general meeting (AGM) and face stricter governance and reporting duties. Listed companies publish audited results within three months of year-end, so the audit timetable for a listed or public company is tighter.
A company with foreign equity above 10% in Nepal must complete an annual audit and submit its audited financial statements to the Department of Industry and the Inland Revenue Department. That foreign-investment company audit carries cross-border reporting duties and supports profit repatriation through our FDI company registration service.
A non-profit in Nepal that receives foreign donations must submit audited accounts to the Social Welfare Council and meet its donors' audit terms. An NGO audit, Social Welfare Council filing included, covers both, so the organisation keeps its funding and registration in good standing.
The audit requirements in Nepal reach 6 groups of entities:
The statutory audit of banks, including a development bank in Nepal, follows BAFIA 2073, insurers follow the 2079 insurance law and cooperatives the 2074 law. Small private companies may qualify for the exemption, but shareholders holding 10% or more can override it.
Internal audit vs statutory audit comes down to 4 differences, and the last row compares external, financial and due diligence audits:
Statutory (legal) audit
Internal audit
The difference between internal and external review, and between a financial audit vs a legal one, lies in who requires it and who reads the report.
The statutory audit process in Nepal runs in 7 steps, and the auditor at the centre of it must be independent and ICAN-licensed:
The audit needs 10 sets of records, and organized records shorten the examination:
A checklist for the statutory audit of a company is available on request.
Audit fees in Nepal are determined by the entity's size, complexity and the time the audit requires, in line with the ICAN directive for determination of audit fees (2078). The minimum audit fee ICAN sets under that audit fee directive is a floor, and out-of-pocket expenses on an annual statutory audit, such as travel to branch sites, are agreed in the engagement letter. Request a consultation for an assessment of your audit.
The time a statutory audit takes depends on the quality of your records, and the legal deadlines are fixed. Audited statements, filed with the Office of the Company Registrar, and the AGM fall within six months of fiscal year-end, and the income-tax return is due within three months, so plan the audit early through our annual compliance calendar.
Business Registration Nepal provides statutory audit services to companies across Nepal from our office in Kapan, Kathmandu, in these areas:
Contact our Kathmandu office to discuss your company's audit.
Business Registration Nepal offers 4 factual reasons to appoint our chartered accountants for your statutory audit:
Each audit is signed and certified by a chartered accountant (Member, ICAN) who holds an ICAN certificate of practice, as Nepal law requires for a statutory audit.
Our chartered accountant brings more than 10 years of industry experience.
We prepare each company financial audit to comply with the Companies Act 2063 and the Nepal Financial Reporting Standards.
We maintain auditor independence and ensure each audit is complete within the statutory deadlines.
Yes, under the Companies Act 2063 every private and public company in Nepal must complete an annual statutory audit. The only relief is the narrow small-company exemption, which shareholders holding 10% or more can override.
It is the legally required annual audit of a company's financial statements by an independent ICAN-licensed chartered accountant. In practice, the statutory audit meaning is a statutory financial audit that ends in an audit opinion (unqualified/qualified) on whether the accounts give a true and fair view.
The difference between statutory and internal audit is that a statutory audit is mandatory and external, carried out by an independent chartered accountant for shareholders and regulators. An internal audit is voluntary and ongoing, run by the company's own team for management.
Statutory audit in Nepal is governed mainly by the Companies Act 2063, with the Income Tax Act 2058 and the Nepal Chartered Accountants Act 2053. The Audit Act 2075 governs public-sector audit, not company audit.
Only an independent, ICAN-licensed chartered accountant or audit firm in Nepal may perform a statutory audit, appointed by the board or the AGM. Before you appoint qualified auditor teams, confirm the ICAN licence: the independent auditor must stay independent, so an employee or director of the company cannot audit its accounts.
A private company must appoint its auditor within six months of incorporation, and a public company approves its auditor at the AGM. The board and shareholders approve each later appointment for the regulated year.
Yes, small private companies with turnover below NPR 10 million and fewer than 50 employees may qualify for exemption. The exemption falls away if shareholders holding 10% or more demand an audit.
A statutory audit needs your financial statements, ledgers, bank statements, PAN and VAT records, invoices, payroll, contracts, the fixed-asset register and prior audit reports. Complete records cut the audit time.
The annual statutory audit must be complete, with audited statements and the AGM, within six months of fiscal year-end, and the income-tax return is due within three months. Our annual compliance service tracks both dates.
Audit fees in Nepal are determined by entity size, complexity and time, in line with the ICAN audit-fee directive 2078. Request a consultation for an assessment of your company.
A company that fails to complete its statutory audit faces Companies Act penalties of up to NPR 100,000. The Income Tax Act adds a penalty of 0.05% of turnover per day, up to NPR 50,000 a year, for late audited returns.
Yes, FDI companies with foreign equity above 10% and NGOs receiving foreign donations must be audited and file with the Department of Industry and IRD or with the Social Welfare Council. Corporate foreign-invested entities follow the same Companies Act rules as Nepalese companies, and our FDI company registration service covers their setup.
Yes, audited financial statements are required for the income-tax return once turnover passes NPR 20 million, or NPR 40 million for manufacturing. A statutory compliance audit therefore supports both your tax filing and your tax clearance certificate.
A consultation with our chartered accountants reviews your company type, records and deadlines for a statutory audit in Nepal. Call +977 9817373909 or request your consultation online.
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