Question: What Do We Do In Statutory Audit?

What are the types of 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..

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 it compulsory to appoint auditor for 5 years?

As per Section 139(2) of the Companies Act, 2013, the aforesaid categories of Companies have to mandatorily rotate their Auditors as follows: An individual can be appointed as auditor for a term of five consecutive years; An audit firm can be appointed as auditor for two terms of five consecutive years.

How do I prepare a statutory audit report?

Contents of an Audit Report 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.

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 in banks?

Updated on – 12:39:33 PM. Statutory Audit is a type of audit which is mandated by a Law or a Statute to ensure the books of accounts presented to the regulators and public are true and fair. Statutory audit is mandatory if certain criteria are being met by the business.

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.

Is statutory audit compulsory for all companies?

For LLP: Statutory audit is applicable if turnover in any financial year exceeds Rs. 40 Lakhs or its contribution exceeds Rs. … For Private Company/ Public Company: Mandatory irrespective of Turnover, profits etc. If the company is incurring loss even then statutory audit is required.

How do I get a bank statutory audit?

In case any of the partner of an audit firm is nominated/elected for a period of atleast 3 years or more on the Board of any public sector bank then his/her such experience for a maximum period of three years will be considered as bank audit experience, provided such experience has not been earned by him/her …

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.

Is tax audit compulsory for company?

A tax audit is mandated on all companies, limited liability partnerships (LLPs), and individuals whose turnover crosses a particular threshold limit. Taxpayers who get their accounts audited under any other law do not have to get their accounts audited again for a tax audit.

Is statutory audit compulsory for LLP?

The accounts of every LLP shall be audited in accordance with Rule 24 of LLP, Rules 2009. Such rules, inter-alia, provides that any LLP, whose turnover does not exceed, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty five lakh rupees, is not required to get its accounts audited.

What is the purpose of statutory audit?

The purpose of the statutory audit is to provide an independent opinion to the shareholders on the truth and fairness of the financial statements, whether they have been properly prepared in accordance with the Companies Act and to report by exception to the shareholders on the other requirements of company law such as …

What is the limit for statutory audit?

The Act states that if the turnover of any enterprise is more than 1 crore, and in case of professionals if the value of services is more than Rs. 50 lacs then they have to get their books of accounts audited by a Chartered Accountant.

What are the features of statutory audit?

Salient Features of Statutory AuditStatutory audit has been made compulsory bylaw.Its scope is also determined by the law. … The Companies Act, 1956 has prescribed qualifications for a statutory auditor. … Similarly the law has also laid down the rights, duties and liabilities of the statutory auditor.More items…

Who Cannot be appointed as an auditor?

If the person to be appointed or his partner holds even a single share (or other securities) of a company, he is not eligible to be appointed as an auditor. However, if a relative of such person holds securities of face value not exceeding Rs.

What are the duties of an auditor?

Duties of an Auditor. An auditor is an authorised personnel that reviews and verifies the accuracy of financial records and ensures that companies comply with tax norms. They primarily objective is to protect businesses from fraud, highlight any discrepancies in accounting methods, among other things.

What is the procedure of audit?

Audit procedures are the processes, techniques, and methods that auditors perform to obtain audit evidence which enables them to make a conclusion on the set audit objective and express their opinion. Sometimes we call audit procedures audit programs.

What is difference between statutory audit and internal audit?

Answer: Statutory audit is an external audit that is conducted by an audit firm or individual external to the organisation. … One of the key differences is that statutory auditors report to the shareholders of the company, whereas internal auditors report to management of the Company.

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 called statutory audit?

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