A statutory audit is an independent examination of a company's financial records and financial statements to ensure they are accurate and comply with applicable laws and accounting requirements. It helps maintain transparency in financial reporting and gives stakeholders confidence in the company's financial information.
We conduct statutory audits by reviewing financial records, supporting documents, accounting practices, and relevant statutory requirements. Our approach focuses on accuracy, proper verification, and a clear understanding of the organisation's financial position.
What Does a Statutory Audit Cover?
A statutory audit involves reviewing different aspects of a company’s financial records and reporting practices. The key areas covered include:
Review of Financial Statements
Examination of the balance sheet, profit and loss statement, and other financial statements to check their accuracy and consistency with the underlying accounting records.
Verification of Books of Accounts
Review of accounting records, ledgers, vouchers, invoices, and supporting documents to verify financial transactions and identify discrepancies.
Examination of Income and Expenses
Checking recorded income, business expenses, and related transactions to ensure they are properly documented and accounted for.
Verification of Assets and Liabilities
Review of assets, liabilities, balances, and relevant supporting records to assess whether they are appropriately recorded in the financial statements.
Review of Statutory Compliance
Checking compliance with applicable legal, accounting, and reporting requirements relevant to the organisation and the audit assignment.
Audit Reporting and Observations
Documenting audit findings, communicating significant observations, and preparing the required audit report in accordance with applicable requirements.
Frequently Asked Questions
Statutory audit requirements depend on the type of entity and the applicable laws. Companies registered under the Companies Act, 2013 are generally required to have their accounts audited, subject to the provisions applicable to them.
Commonly required documents include books of account, financial statements, bank statements, invoices, vouchers, tax records, details of assets and liabilities, and other supporting documents relevant to the audit.
The purpose is to independently examine financial statements and provide an audit opinion on whether they present a true and fair view in accordance with the applicable financial reporting framework.
For companies subject to statutory audit requirements under the Companies Act, 2013, the audit is generally conducted for each financial year.
The time required depends on the size of the organisation, the complexity of its transactions, the quality of its financial records, and the availability of supporting documents.
The auditor examines the discrepancies, seeks relevant explanations and supporting evidence, and considers their impact on the financial statements and audit opinion in accordance with applicable auditing standards.
