Quick Answer: What Is Meant By Statutory Audit?

How do you do a statutory audit?

The main purpose of performing statutory audit is determining whether the organization is presenting with an accurate and fair representation of its current financial position.

It is performed by closely examining accounting information from bookkeeping records, bank balances and financial transactions..

What is statutory audit and internal audit?

Statutory audit is an external audit that is conducted by an audit firm or individual external to the organisation. Internal audit is conducted by employees from within the organisation. … Statutory audit is mandatory under the Companies Act, 2013, whereas internal audit is not mandatory for all companies.

Is Auditing compulsory?

A taxpayer is required to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs 1 crore in the financial year. However, a taxpayer may be required to get their accounts audited in certain other circumstances.

What is audit example?

For example, an auditor looks for inconsistencies in financial records. … An audit might include collecting a sample from a pool of data using a specific protocol and analyzing the findings to generalize about the data pool’s characteristics.

What is the auditing process?

Auditing is defined as the on-site verification activity, such as inspection or examination, of a process or quality system, to ensure compliance to requirements. … Some audits have special administrative purposes, such as auditing documents, risk, or performance, or following up on completed corrective actions.

What are the 4 types of audit reports?

Four Different Types of Auditor OpinionsUnqualified opinion-clean report.Qualified opinion-qualified report.Disclaimer of opinion-disclaimer report.Adverse opinion-adverse audit report.

Who appoints the statutory auditor?

Statutory auditors are elected by shareholders and hold a position in the hierarchy alongside the board of directors. A kabushiki kaisha must have at least one statutory auditor, unless the transfer of shares is restricted in the articles of incorporation.

How do I get a bank statutory audit?

The following procedure will be followed for appointment of Statutory Branch Auditors (SBAs) in Public Sector Banks (PSBs): The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.

What do you do in statutory bank audit?

General – Area of Review Pre Audit. a) Review of Latest available inspection reports of Internal/Concurrent/RBI/Statutory Auditors and compliance thereof. b) Review of Closing Circular issued by Head Office. c) Study of Significant accounting policies of the Bank & computer system. … Certain Aspects.

What is the main object of audit?

The objective of an audit is to form an independent opinion on the financial statements of the audited entity. The opinion includes whether the financial statements show a true and fair view, and have been properly prepared in accordance with accounting standards.

Is internal audit a good job?

Yes, internal audit is a great career choice. … If one considers the importance of Sarbanes-Oxley in assuring that executives understand their company, the internal auditor is critical to the process.

What is meaning of statutory audit?

A statutory audit is a legally required check of the accuracy of the financial statements and records of a company or government.

What are 3 types of audits?

What Is an Audit?There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits.External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.More items…•

What is the limit for 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 difference between tax audit and statutory audit?

Statutory Audit is applicable to all the Companies registered under Companies Act 2013 and erstwhile Companies Acts. Tax Audit is applicable on all Companies, LLP’s, Partnership Firms as well as Individuals or Professionals whose turnover or Gross Receipts crosses the threshold limit.

Is statutory audit and external audit same?

Statutory Auditors are a part of the external audit process. Statutory auditors are focused on the various financial accounts or risks associated with the domain of finance and are appointed by the shareholders of the company.

What is statutory and non statutory audit?

Statutory audit is authorised and governed by law or a statute; whereas the audit got done voluntarily and without any legal or statutory force is non-statutory. Examples of statutory audits are the audits of companies, banks, insurance, charitable trusts, corporate bodies and co-operative societies.

What comes under 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.