Statutary Audit



Statutory Auditor are qualified Chartered Accountants who are independent of the Business. Statutory auditors are not optional and must be appointed, if a business satisfies certain criteria. A "statutory audit" is a legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit - to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions. Statutory Audit is the audit made compulsory by the law. Tax Audit is an auditmade compulsory by the Income Tax Act, if the turnover/gross receipts of the assesses reaches the specified limit. Statutory reporting is the mandatory submission of financial and non-financialinformation to a government agency. Each industry has its own set of laws and regulations (statues) that mandate reports.

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Overview of Statutor Audit

A statutory auditor is an auditor who is usually a part of the internal audit system that operates in one of the following areas and sometimes he may operate in more than one area. The following areas are:

Reviewing of the accounting and all the related internal controls. Therefore, the function of a statutory auditor is clearly defined where he is usually given the specific responsibility to review the accounting systems and the internal controls related to it and also to monitor all their operations while the management has the work of seeing the overall accounting system and its adequacy.

Reviewing of the financial as well as operating information that includes various functions like identifying, measuring, classifying and reporting all such information that specifically enquire individual items that includes detailed and thorough testing of transactions, balances and procedures. A statutory auditor may have to examine the efficiency, effectiveness and economy of operations that may also include all the non financial controls.