Q&A

What do you check in a statutory audit?

What do you check in a statutory audit?

Check any expenditure of capital nature charge in revenue expenses. Check whether GST tax input claim on any expenses. Check such input claim in GST return in GSTR 3b. Identify the expenses which are disallowed under Income Tax Act, 1961.

How does a statutory audit function?

A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records. The purpose of a financial audit is often to determine if funds were handled properly and that all required records and filings are accurate.

What is the audit procedure?

Audit Procedures are steps performed by auditors to get all the information regarding the quality of the financials provided by the company, which enable them to form an opinion on financial statement whether they reflect the true and fair view of organisation financial position.

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What is audit life cycle?

An audit cycle is the accounting process an auditor uses to ensure a company’s financial information is accurate. The audit cycle typically involves several distinct steps, such as the identification process, audit methodology stage, audit fieldwork stage, and management review meeting stages.

What’s the audit process?

A set of actions and procedures to control an organization. They aim to test and prove that processes are being conducted effectively and follow due control mechanisms. They also aim to detect opportunities for improvement in the audit process.

What is the limit of statutory audit?

1. For LLP: Statutory audit is applicable if turnover in any financial year exceeds Rs. 40 Lakhs or its contribution exceeds Rs. 25 Lakhs.

What is statutory audit and how to conduct it?

Statutory audit is one of the main types of audits, required legally to review the accuracy of a company or government’s financial accounts. It is conducted to gather different information so that the auditor can give his opinion on the true and fair view of the company’s financial position as on the balance sheet

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Can a statutory auditor demand secret information from a company?

No information is secret, when the statutory auditor asks for the same. Since, the management is not providing the information & explanation asked for, the statutory has right to report the same in his audit report. Auditor needs to consider whether the suspected transactions are material in nature. Only if yes, he can demand the information.

How to conduct an audit for the first time?

If audit is conducted for the first time, Following steps should be followed. Make sure that all discrepancies reported by internal auditor has been sorted out by management and accounts staff. Then, also go through previous year Statutory auditors report and study their finding in audit.

Why do auditors need to review financial statements?

Thus, they need the financial statement should be reliable & free from misstatements. A statutory audit means an independent examination of the financial records held by the entity. The purpose of audit is generally to provide an opinion on the true & fair view of financial statements.