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Statutory Audit

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About Statutory Audit

Statutory audit is one of the main types of audit which is required legally to review the accuracy of a company or government’s financial accounts. It is conducted with the purpose is 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 date.
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Audit Compliance

Auditing the books of accounts in compliance with statutory requirements ensures a true and fair view of the financial statements, in accordance with the specific legal conditions under which the audit is conducted. To assure accuracy and transparency, the integration of all financial accounts under the Companies Act, 2013 mandates that these accounts be audited by qualified Chartered Accountants. The auditor supervises and analyzes every account in compliance with the provisions and regulations of the Companies Act, 2013. Statutory audits are essential to ensure the reliability of a company’s annual accounts for various stakeholders such as debtors, creditors, bankers, shareholders, and government authorities.

The purpose of a statutory audit is to allow the auditor to express an independent and unbiased opinion on the financial records of the company. The auditor reviews the company’s financial records and provides an audit report based on their findings. This process helps stakeholders place trust in the accuracy of the financial statements. Beyond shareholders, other stakeholders also benefit from statutory audits, as they can make informed decisions based on audited and authentic financial data.

Advantages of Statutory Audit

  • It increases the authenticity and credibility of financial statements as the financial statements of the company are being verified by an independent party i.e., the auditor.
  • It confirms that management has taken due care while delivering their responsibilities.
  • It also states regarding the compliance with the non-statutory requirements like corporate governance etc.
  • The auditor also comments upon the strength of internal control within the organization along with internal checks among the departments or segments. He also suggests the area where internal control is weak and prone to risk. It helps the company to mitigate the risk and results in the improvement of the performance of the company.
  • The financial statement of the small company for whom audit might not be applicable get more values if it is audited one because with the help of the audited financial statements it becomes easier for the companies to get banking loan and other types of facilities on producing of financial statements which are audited by an independent auditor as the audited statements are more reliable and authentic.