Who Does Internal Audit for Jewellery Showrooms in Tamil Nadu?
TL;DR
- Jewellery chains in Tamil Nadu use in-house auditors, Big Four or national mid-size CA firms, or regional practices such as Astral Business Consulting LLP. Old-gold buying is the riskiest counter: each exchange needs a weighed and purity-tested piece, a purchase entry and the old metal's value shown on the new bill. Metal sent to karigars without tax must return within a year unless the period is extended, or GST falls due with interest as if it were sold.
Last updated: 22 October 2026
Quick Answer: A Tamil Nadu jewellery chain can staff internal audit with its own in-house internal audit team or hire an outside firm. The outside choices are a regional audit and consulting practice, for example Coimbatore-based Astral Business Consulting LLP, a national mid-size CA firm or a Big Four network firm. Either way, the audit traces gold, cash and scheme money.
An internal audit for jewellery shop chains is less a ledger review than a trace. A showroom holds valuable stock that is easy to carry away, takes a large share of its receipts in cash and old gold, and runs savings schemes that collect customer money months before any jewellery changes hands. The audit therefore asks one question at every counter: can the gold, the cash and the scheme money each be traced from the day they came in to the day they left?
Should a jewellery chain build its own audit team or bring in a firm?
Section 138 of the Companies Act, 2013 leaves the Board free to appoint any chartered or cost accountant, or another professional of its choice, who may sit on the payroll or work from an outside firm. The four routes compare as follows:
- In-house internal audit team. Staff auditors who know the counters, the karigars and the scheme ledgers. Many co-source, keeping routine branch reviews and bringing in a firm for specialist checks or distant branches.
- Regional audit and consulting practice. Coimbatore-based Astral Business Consulting is one; its internal audit service offers process-based internal audit. The firm counts jewellery retail among the sectors it serves.
- National mid-size CA firm. Suited to a chain with branches in several states that wants one firm, one method and one report format across all of them.
- Big Four network firm. Usually engaged by large listed jewellery groups whose audit committees want a global methodology.
Astral reports that its team has built over 1,500 risks and controls for process work, and its Cycle Count division carries out overnight and retail showroom stock verification, so one firm can test the controls and count the metal.
Two checks settle any shortlist: experience of showroom counters, not only factory gates, and independence. A firm that writes up the showroom's books cannot audit them, and under section 144(b) of the Companies Act, 2013 a company's statutory auditor may not render it internal audit services, directly or indirectly.
When does internal audit become compulsory for a showroom company?
A private showroom company must appoint an internal auditor if, in the previous financial year, its turnover reached ₹200 crore or more or its outstanding loans or borrowings from banks or public financial institutions went above ₹100 crore at any point; public companies have wider tests, explained in the applicability guide for private and public companies. A chain still below both limits can start voluntarily.
What should the scope cover in a jewellery showroom?
In the internal audit of jewellery industry businesses, the work follows the gold and the money together, from purchase to counter sale. A risk-based scope covers six areas.
| Area | What the audit tests |
|---|---|
| Old-gold exchange | Valuation, purity testing, purchase entry for old gold bought from customers, exchange value on the invoice |
| Karigar settlements | Issue and return of metal, wastage and recovery norms, job-work GST and delivery challans |
| Gold savings schemes | Instalment collection, refunds, maturity delivery, recording of the undelivered liability, and schemes held past their stated term |
| Cash and banking | Daily cash tally, counter collections, deposits, cash sales against GST returns |
| Discounts and offers | Approval limits for discounts, exchange offers and promotional pricing at each branch |
| Hallmarking and billing | HUID on sold articles, invoice fields and registration compliance |
Physical counting of the metal is a separate exercise, covered in the article on stock verification for jewellery showrooms.
How is old-gold exchange audited?
Old-gold exchange is the highest-risk counter in a showroom, because stock of uncertain purity arrives from a customer and leaves as new jewellery plus cash. The audit tests three things: whether the old gold was weighed and purity-tested before a value was quoted, whether the purchase was accounted for correctly, and whether the sale invoice shows the full transaction.
Gold jewellery attracts GST at 3%. On an exchange sale, rule 27 of the CGST Rules values the supply at its open market value or, where that is not available, at the money paid plus the value of the old gold, if that value is known at the time of supply. A jeweller buying old jewellery from an individual consumer is not liable to pay tax under reverse charge, because the consumer is not selling in the course or furtherance of business. The audit samples invoices to confirm the valuation, checks that the old gold entered the purchase records, and verifies that metal was melted or issued to a karigar only after the entry was complete.
What karigar issues does the audit look at?
Karigars, the artisans who convert metal into finished jewellery, create a control problem unique to the trade: stock leaves the showroom, returns as a different product, and loses some weight in between.
A registered karigar charges GST at 5% on job charges for gold jewellery. The concessional rate applies to job work on goods belonging to a registered person; making charges billed to an unregistered individual customer are a separate supply at 18%. Under section 143 of the CGST Act, inputs sent to a job worker without payment of tax must come back, or be supplied from the job worker's premises, within one year, and capital goods within three. Otherwise the goods are deemed supplied to the job worker on the day they were sent, and the principal owes GST with interest. The audit checks delivery challans for each issue, weighs returns against issues, and tests wastage against the norms the company has fixed.
How are gold savings schemes and cash handled?
Both are tested record by record, to a receipt, a deposit or an approved payment.
Gold savings schemes
The audit tests whether every instalment is receipted at once, whether exit refunds are approved and paid through banking channels, and whether the liability for undelivered jewellery is recorded at each close. Scheme terms as marketed are compared with the agreement the customer signed.
The audit also lists every scheme whose money has stayed with the company longer than the term printed on the member's card, and every scheme closed by a cash refund instead of a jewellery purchase. The term matters: the Companies (Acceptance of Deposits) Rules, 2014 keep an advance for the supply of goods out of the meaning of deposit only if it is appropriated against supply within 365 days of acceptance. A proprietorship or partnership jeweller faces the Banning of Unregulated Deposit Schemes Act, 2019, which bans unregulated schemes that take money with a promise to return it in cash or in kind, with or without a bonus, unless an exclusion applies, such as an advance for goods that is repayable if the goods are not supplied. The list goes to the finance head and legal advisers.
Cash, discounts and offers
The audit tests daily cash tallies at each counter, the timing of bank deposits, the reconciliation of counter collections with GST returns, and the approval trail for cash payments. Discounts and exchange offers are tested against the approval limits fixed for each branch manager.
What should a jewellery audit checklist contain?
An internal audit checklist for jewellery industry retailers turns the scope above into tests a chain repeats every cycle. Each line names the record and the evidence to keep:
- Old gold: purchase entry, purity test record, valuation approval and exchange value on the sale invoice for each sampled exchange.
- Karigar: delivery challan, return weight, wastage norm, recovery entry and job-work return for each sampled issue.
- Schemes: instalment receipts, refund approvals, maturity deliveries, the undelivered liability at each close and the list of schemes held past their term.
- Cash: daily tally, deposit slip, GST reconciliation and approval trail for sampled cash payments.
- Discounts and hallmarking: approval limit and invoice price for each sampled discounted sale, and HUID presence on sampled sold articles.
How does hallmarking compliance enter the audit?
Hallmarking is part of the sales control of a gold showroom in 32 Tamil Nadu districts, including Chennai and Coimbatore; the Nilgiris, Tiruvallur, Virudhunagar, Ariyalur, Perambalur and Ranipet are not yet covered. The Bureau of Indian Standards introduced mandatory hallmarking of gold jewellery on 23 June 2021 in 256 districts, and its latest amendment, dated 3 August 2026, extends coverage to 392 districts. Since 1 July 2021, hallmarked gold articles carry a six-digit alphanumeric HUID alongside the BIS mark and the purity caratage.
A jeweller selling hallmarked gold needs a Certificate of Registration from BIS, obtained through the National Single Window System; it is one-time, carries no fee and has lifetime validity. The audit samples sold articles for HUID presence and checks that sale invoices show the article description, net precious-metal weight, purity and hallmarking charges separately.
Which showroom counters should your first audit cycle cover?
A first cycle usually starts with one flagship showroom, covering old-gold, karigar, scheme and cash controls, and then carries the same checklist to every branch. Share your showroom count and locations through the contact page to scope that first cycle.