India mulls exempting micro firms under ₹1 crore from statutory audits

This policy aims to support micro-enterprises but introduces regulatory risks. While beneficial for ease of doing business, it could compromise transparency and increase the risk of financial irregularities in the unlisted SME space.

• •Government is deliberating on a new proposal aimed at relieving small enterprises from the requirement of undergoing mandatory audits.
• •Initiative is designed to facilitate compliance.
• •Raises alarms regarding potential fraudulent activities and insufficient regulatory supervision.
• •Many stakeholders are anxious that it might result in a rise in the creation of shell companies.
• •Risk flag: Increased risk of fraud and shell companies