STATUTORY AUDIT:
In India, the laws regarding a statutory audit are in the Companies Act, 2013. A statutory is another name of a financial audit. It is essentially an audit of the final statements of a company, i.e., the profit and loss and the balance sheet for the financial year.
Furthermore, a statutory audit helps determine whether the management of the company took all the steps necessary to ensure proper financial records were kept and used in the preparation of financial statements. It can also help in detecting any deficiencies in complying with relevant regulations.
- A statutory audit is an audit required under the statute. However, the statutory requirements can at federal, state or central level.
- The shareholders in the Annual General Meeting (AGM) of the company, appoint a person as statutory auditor.
- A statutory audit means an independent examination of the financial records held by the entity. The purpose of audit is to express the views or opinion whether the books of accounts and financial records are true and fair.
- The entity has to provide all information, explanations, records & reports as & when required by the auditor.
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