A statutory audit is a legally required review of the accuracy of a company's or government's financial statements and records. The purpose of a statutory audit is to determine whether an organization provides a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records, and financial transactions.
An audit is an examination of records held by an organization, business, government entity, or individual, which involves the analysis of financial records or other areas.
The purpose of a financial audit is often to determine if funds were handled properly and that all required records and filings are accurate. At the beginning of an audit, the auditing entity makes known what records will be required as part of the examination. The information is gathered and supplied as requested, allowing the auditors to perform their analysis. If inaccuracies are found, appropriate consequences may apply.
Statutory Audit as the name suggests is a compulsory audit for all companies. Every entity which is registered under the Companies Act, as a Private Limited or a Public Limited company has to get its books of accounts audited every year.
There are many benefits to having an audit of a Company's financial statements especially for privately held businesses with revenue over $1,000,000. An audit provides the highest level of assurance that a Company's financial statements are fairly stated (in all material respects)ls etc. along with the prescribed documents which can be prepared with the help of professional.
As per Companies Act, 2013, every company, irrespective of its sales turnover or nature of business or capital must have its book of accounts audited each financial year. The accounts of a Limited Liability Partnership (LLP) must be audited if it has an annual turnover of Rs. 40 lakhs or more.
Should mention the overall impression obtained from the audit of financial statements. State the basis on which the opinion as reported has been achieved. Facts of the basis should be mentioned. If any other reporting responsibility exists, the same should be mentioned.
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