What is meaning of statutory audit?

A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records. Firms that are subject to audits include public companies, banks, brokerage and investment firms, and insurance companies.

What are examples of statutory audit?

Examples of Statutory Reports

• Statutory Report submitted at the statutory meeting of the company.
• Directors’ Report to the Annual General Meeting.
• Annual Return.
• Auditors’ Report.
• Reports by Inspectors appointed to investigate the affairs of the company.

What is statutory audit Wikipedia?

A “statutory audit” is a legally required review of the accuracy of a company’s or government’s financial records.

Which types of audit is a statutory audit?

The two most common types of statutory audits in India are:

• Tax audits; and.
• Company audits.

What is statutory audit in commerce?

Statutory Audit means a type of audit mandated by the law or a statute to make sure that the book of accounts is true and fair which is presented to the public and regulators. If the business meets certain criteria, then the statutory audit is mandatory. Generally, statutory audit means financial audit.

What is the difference between statutory audit and internal audit?

The most obvious difference lies in the appointment of the auditor. While internal auditors are appointed by the management of the company, statutory auditors are appointed by the shareholders of the company. Internal audit also tries to detect any anomalies and errors that may have crept in the financial statements.

Who needs a statutory audit?

The accounts of a Limited Liability Partnership (LLP) must be audited if it has an annual turnover of Rs. 40 lakhs or more or Rs. 25 lakhs or more capital contribution. Tax audit on the other hand is required for Proprietorships and Partnership Firms that have cross a certain threshold of sales.

Who can conduct statutory audit?

Who can be appointed as Statutory Auditor? A statutory auditor of a company is a person appointed to verify the correctness of the accounting records of the company. As per the Companies Act, 2013, only a practising Chartered Accountant (CA) is eligible to be appointed as the statutory auditor in a company.

What should we do in statutory audit?

The auditor must verify the regular deposit of statutory dues like income tax, Goods and Service Tax (GST), wealth tax, sales tax, customs duty, cess tax, etc., with the appropriate authorities. The auditor must check the statutory due arrears.

How is statutory audit conducted in India?

What Is The Process Of A Statutory Audit In India?

1. Assets. The auditor should physically visit and verify the fixed assets.
2. Inventories. The auditor must physically verify the inventories of the company.
3. Loans.
4. Deposits.
5. Statutory Dues.
6. Profit and Loss.
7. Other Dues and Payments.
8. Loan Usage.

Why is statutory audit important?

Why Statutory Audit Is Important: Statutory audit is important as the audit report presents the true and fair assessment of company financial statements which help to retain the confidence of shareholders and also improve the company’s internal controls and systems.

What is meant by statutory audit?

Statutory audit is the engagement of an audit of financial statements by independent auditors to the entity’s financial statements as the compliance with the local law that the entity is operating. In most of the countries or territories, the audit of financial statements is required by law or status.

What are the purposes of statutory audit?

Statutory auditors have several functions: They initiate derivative suits against the board of directors on behalf of the shareholders, and represent the company in those suits. In “mid-size” and “large” companies (i.e. In “mid-size” companies, they audit the financial reports submitted by the company.

What are the advantages and disadvantages of statutory audit?

Advantages and disadvantages of statutory audits. controls are weak or inadequate, the auditor will provide recommendations for improvement. This will help management in reducing risk and improving the performance of the company. Even where a statutory audit is not required, for example due to small company statutory exemption limits,…

What is the difference between statutory audit and tax audit?

The differences between statutory audit and tax audit are drawn clearly on the following grounds: An audit, which is required by the statute (law) is known as a Statutory audit. Statutory Audit is performed by external auditors whereas tax audit is conducted by a practising Chartered Accountant.