Is statutory audit and financial audit same?

Is statutory audit and financial audit same?

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

What is difference between audit and statutory audit?

An internal audit performs various duties such as analysis of accounts and different activities of the organization. On the other hand, a statutory audit is only concerned with inspection, spotting errors, and checking the financial reports, accounts, and related documents.

What is the difference between statutory audit and external audit?

Generally statutory audit is the audit conducted by a Chartered Accountant required by the Ministry of Corporate Affairs’. An external audit is an audit authrised by any other govt law of statute and not voluntary by any business house.

Which is best statutory audit or internal audit?

In my view, Statutory audit is better compared to internal audit because internal audit is like being stuck at one place. Also, whatever discrepancies you find are of no use if the management feels that it should be kept hidden. All your work goes in vain. You end up being an employee of the company.

How is statutory audit performed?

Statutory audit procedure includes sending of questionnaires, checklists, surveys and also formal notifications. Understanding Controls: A business entity’s control of operations is learnt by an auditor by asking the employees or even external auditors.

What are the advantages of statutory audit?

Advantages of Statutory Audit:

  • It increases the authenticity of the financial reports as the statements are properly verified by the auditor.
  • Improves the credibility of the organization because when the audits have been conducted the financial reports are free from error, fraud and misrepresentation, and inaccuracies.

What are the examples of statutory audit?

Examples of Statutory Reports

  • Statutory Report submitted at the statutory meeting of the company.
  • Directors’ Report to the Annual General Meeting.
  • Annual Return.
  • Auditors’ Report.
  • Reports by Inspectors appointed to investigate the affairs of the company.

What is the difference between statutory and non statutory audit?

A non-statutory audit is a form of audit which is not legally required. Statutory audits mainly focus on financial activities whereas a non-statutory audit is not limited to financial reporting. Non-statutory audits can be used for any part of an organisation.

What is statutory audit and how it is conducted?

Statutory Audit means a type of audit mandated by the law or a statute to make sure that the book of accounts is true and fair as presented to the public and regulators. This is conducted as per the provisions under Companies Act or even Tax Audit under Section 44AB of the Income Tax Act.

Is the audit of financial statements required by law?

In most countries or territories, the audit of financial statements is required by law or status. And the entity that operated in those countries is required to submit the audited financial statements as per the law requires.

What happens if there are inaccuracies in a statutory audit?

If inaccuracies are found, appropriate consequences may apply. Being subject to a statutory audit is not an inherent sign of wrongdoing. Instead, it is often a formality designed to help prevent activities such as the misappropriation of funds by ensuring regular examination of various records by a competent third party.

What is the Financial Audit Manual (FAM)?

The Financial Audit Manual (FAM) is a joint effort between GAO and the Council of the Inspectors General on Integrity and Efficiency (CIGIE). The FAM, which consists of three volumes, presents a methodology to perform financial statement audits of federal entities in accordance with professional standards.