All about LLP Audit and Audit report format for LLP

Latest Limited Liability Partnership Audit Report format

Audit Requirements under LLP Act, 2008, and Rules

Section 34 of the LLP Act, 2008: This section mandates the maintenance of books of accounts, preparation of the Statement of Account and Solvency (SoAS), and audit of accounts for LLPs, with specific details outlined in the LLP Rules, 2009.
Rule 24 of LLP Rules, 2009: This rule provides the operational guidelines for maintaining accounts and conducting audits, including applicability thresholds and exemptions.

1. Maintenance of Books of Accounts by LLP

Requirement: Every LLP must maintain proper books of accounts for each financial year, including FY 2024-25, as per Section 34(1) and Rule 24(1).
Basis: Accounts can be maintained on either a cash basis or accrual basis using the double-entry system.
Contents: The books must:
- Disclose the financial position of the LLP with reasonable accuracy.
- Enable designated partners to ensure compliance with the LLP Act for the Statement of Account and Solvency.
- Include details of money received and expended, assets and liabilities, cost of goods, inventories, and other particulars decided by the partners.
Location: Books must be kept at the LLP’s registered office.
Preservation: Books must be preserved for 8 years from the date they are made (Rule 24(3)).

2. Applicability of Statutory Audit to LLP

General Rule: As per Section 34(4) and Rule 24(8) of the LLP Rules, 2009, the accounts of every LLP must be audited unless exempted.
Audit Thresholds for FY 2024-25:
- Audit is mandatory if either of the following conditions is met in the financial year (April 1, 2024, to March 31, 2025):
  - Turnover exceeds ₹40 lakh, or
  - Contribution by partners exceeds ₹25 lakh.
- Exemption: An LLP is exempt from audit if:
  - Its turnover in FY 2024-25 does not exceed ₹40 lakh, and
  - Its contribution does not exceed ₹25 lakh.
Voluntary Audit of LLP: Even if exempt, partners may opt for an audit voluntarily, in which case it must comply with Rule 24.

3. Appointment of Auditor of LLP

Who Conducts the Audit: The audit must be conducted by a Chartered Accountant in practice appointed by the LLP’s designated partners.
Timing of Appointment:
- For FY 2024-25, the auditor should have been appointed at least 30 days before the end of the financial year, i.e., by March 1, 2025 (Rule 24(11)(b)).
- For the first financial year of an LLP, the appointment can be made at any time before the end of the FY (Rule 24(11)(a)).
- To fill a casual vacancy or vacancy due to removal, the appointment must occur as needed.
Default Appointment: If designated partners fail to appoint an auditor, other partners may do so (Rule 24(12)).
Tenure: An auditor or auditors of an LLP shall hold office in accordance with the terms of his or their appointment and shall continue to hold such office till the period-
(a) the new auditors are appointed, or
(b) they are re-appointed.

4. Filing Requirements Related to LLP Audit

Statement of Account and Solvency (Form 8):
- Due Date: Must be filed with the Registrar of Companies (RoC) within 30 days from 6 months after the end of FY 2024-25, i.e., by October 30, 2025.
- Certification:
  - If audit is mandatory (turnover > ₹40 lakh or contribution > ₹25 lakh), Form 8 must be certified by the auditor.
  - If audit not applicable Form 8 must be certified by the designated partners.
- Penalty under Section 34(5) over and above late fees
  - LLP: Liable to a penalty of ₹100 per day of delay, with a maximum cap of ₹1,00,000.
  - Designated Partners: Each designated partner is liable to a penalty of ₹100 per day, with a maximum cap of ₹50,000 per partner.
Annual Return (Form 11):
- Due Date: Must be filed by May 30, 2025, within 60 days from the end of FY 2024-25.
- Does not directly relate to audit but is a mandatory filing for all LLPs.
- Certification:
  - LLP with turnover up to ₹5 crore or contribution up to ₹50 lakh in a financial year form 11 can be signed by designated partners,
  - For all other LLPs, a certification from a practicing Company Secretary is required.

5. Non-Compliance penalties related to Audit

Section 34(6) of LLP Act, 2008:
- If an LLP fails to comply with audit or filing requirements (e.g., not conducting a mandatory audit or filing Form 8), every designated partner with LLP are liable to a penalty.
- Penalty: Fine for LLP ranging from ₹25,000 to ₹5,00,000. and for Designated Partners from₹10,000 to ₹1,00,000.
Late Filing of Form 8/Form-11: Additional late filing fees also applies if these forms filed after due date. Please note the late fees is to be paid upfront while filing forms. Whereas, penalty is to be paid on notice from ROC or upon compounding.

6. Lesser penalty for small LLPs

If a small LLP, start-up LLP, or its partner, designated partner fails to comply with any provision of this Act, they will face a penalty equal to half of the specified amount, with a maximum of ₹1,00,000 for the LLP and ₹50,000 for each partner, designated partner, or other person. Read more about small LLPs

Accordingly, LLPs are required to have their accounts audited, with certain exemptions for smaller LLPs. The audit must be conducted in accordance with the prescribed rules and auditing standards under section 34A.

For your ease reference attached herewith draft LLP audit report format: LLP audit report format

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Please note that the provided draft format is a general template and may not be suitable for all LLPs. It’s essential to consult with a qualified chartered accountant to ensure the audit report complies with applicable laws, regulations, and accounting standards. The draft audit report shared in this blog post is intended for informational purposes only. The given report should not be considered as professional advice or a substitute for consulting with a qualified chartered accountant. Kindly share your feedback.