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AuditNov 21, 2025· 7 min

Why IFC is not just for listed companies

Internal Financial Controls are often treated as a listed-company burden. That framing is expensive.

Section 143(3)(i) of the Companies Act requires the statutory auditor to opine on the adequacy and operating effectiveness of Internal Financial Controls over Financial Reporting for every company covered — not just listed. The exemptions are narrow.

The value, though, is not the audit opinion. It's the accidental discipline: documented approval matrices, segregation of duties, exception logs, and quarterly control-testing convert a 'trust the CFO' business into an institutional one — which is exactly what buyers and investors reward.

Design a minimum viable IFC in 4 domains: revenue-to-cash, procure-to-pay, hire-to-retire, and record-to-report. 20–25 key controls covering these four flows is enough for a ₹25–500 Cr business. More is theatre.

Test annually, not once. A control that worked last audit and hasn't been re-tested since is, in effect, an unaudited control.

Further reading

Primary sources & references.

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