# Audit of Accounts of Foreign Company

## Documents to attach with Financial Statements

A foreign company must attach the following along with its FS:

Statement of related party transactions
Statement of repatriation of profits
Statement of transfer of funds (to and from any country outside India)

## Audit Requirement

The foreign company must get the accounts of its Indian business operations audited by a practising CA or a Firm/LLP of practising CAs.
Provisions of Chapter X (Audit and Auditors) of the Companies Act, 2013 shall apply mutatis mutandis to a foreign company.

## Key Takeaways

Audit scope is limited to Indian business operations (not global operations).
Only Indian practising CAs/firms are eligible.
All audit provisions applicable to Indian companies under Chapter X apply with necessary modifications.

Worked example

### Example 1

Example: XYZ Inc., a US company, has a branch office in Mumbai. For FY 2025-26, XYZ must (a) get its Indian branch accounts audited by an Indian practising CA, and (b) attach statements of related party transactions, repatriation of profits, and transfer of funds along with its financial statements filed with the ROC.

⚠️ Common exam mistakes

Assuming the entire global accounts of the foreign company must be audited — only Indian business operations require audit.
Engaging a foreign auditor — only Indian practising CAs/firms are permitted.
Forgetting to attach the three statements (related party transactions, repatriation, and transfer of funds) along with FS.

Bare-Act text Chapter XXII / Rule 5 of Companies (Registration of Foreign Companies) Rules, 2014 · Companies Act, 2013 read with Companies (Registration of Foreign Companies) Rules, 2014 · click to expand

The foreign company shall get its accounts, of its Indian business operations, audited by a practicing Chartered Accountant or a firm or limited liability partnership of practicing chartered accountants. Provisions of Chapter X i.e. Audit and Auditors shall mutatis mutandis apply to a foreign company.

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