A statutory audit is a legally required review of the accuracy of a company's (or government's) financial statements and records. It is a process of examining all the financial reports and the statements to determine the financial position of a Company.
The main purpose of statutory audit is to provide an independent, true and fair picture of the financial position of the Company to the shareholders.
WHAT IS THE APPLICABILITY OF STATUTORY AUDIT?
1. For LLP: Statutory audit is applicable if turnover in any financial year exceeds Rs. 40 Lakhs or its contribution exceeds Rs. 25 Lakhs.
2. For Private Company/ Public Company: Mandatory irrespective of Turnover, profits etc. If the company is incurring loss even then statutory audit is required.
WHO CAN BE APPOINTED AS STATUTORY AUDITOR?
A practicing chartered accountant or a Chartered accountant firm or LLP can be appointed as a statutory auditor of a company.
Getting letter of engagement.
Conduct Audit as per IGAAP Companies Act, ICAI accounting standards and auditing standards.
Nature of business
Forming an opinion on financial statement of the Company.
Prepare audit Report with remark if any.
Report to shareholders.