When audit is not a statutory requirement?

When audit is not a statutory requirement?

A non-statutory audit is an audit of a company or organisation’s business that is not required by either the law or a regulatory agency or authority.

Is statutory audit and internal audit same?

The most obvious difference lies in the appointment of the auditor. While internal auditors are appointed by the management of the company, statutory auditors are appointed by the shareholders of the company. Internal audit also tries to detect any anomalies and errors that may have crept in the financial statements.

Is it compulsory to have internal audit?

Appointment of internal auditor is mandatory for every producer company irrespective of any criterion. Further, the internal auditor may or may not be an employee of the company.

What is the purpose of a 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 …

Which is not statutory audit?

The non-statutory audit is the audit of financial statements that are not required by law. It is different from the statutory audit in that the entity needs to engage with an audit firm to perform its review in financial statements.

What is statutory audit and internal audit?

Statutory Audit is done annually to form an opinion on the financial Statement of the Company i.e. whether they are showing the true and fair views of the affairs of the Company or not Whereas Internal Audit is done basically to detect and prevent errors and frauds.

Is statutory audit compulsory?

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.

Why is internal audit necessary?

Internal auditing helps in identifying errors and redundancies in operational and control procedures. With an independent and unbiased view, internal auditors provide recommendations to improve the procedure to boost the efficiency and effectiveness of the business and as a result add value to the organization.

What is the requirement of internal audit?

Eligibility Criteria for Appointment of Internal Auditor 50 crore or above during the preceding financial year. Annual turnover of income of Rs. 200 crores or above during the preceding financial year. Outstanding loans or borrowings from either banks or public financial institutions that are exceeding Rs.

Which audit is statutory audit?

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 are the guidelines for conducting an internal audit?

Conducting the internal audit The international standard ISO 19011 ‘Guidelines for Auditing Management Systems’ states that there is an opening meeting for all audits, whether first, second or third party. In an internal audit the company style will dictate the degree of formality.

What’s the difference between internal audit and statutory audit?

Internal audit is not mandatory and it is the choice of the management of the company to get it done by its internal auditors. Management does not want to be red faced in case of any irregularities when statutory audit is conducted which is why, to keep a check on the operations of the company, internal audit is done.

What are the limitations of a statutory audit?

There are inherent limitations to a statutory audit. Statutory auditor cannot verify the 100% records of an entity given the time, money & resource constraints at his end. He cannot give assurance that the financial statements are true & correct in all respects.

Is the Management answerable to shareholders in a statutory audit?

The answer is no. The management is answerable to the shareholders for any qualification in the audit report. In case the report specifies the material deficiencies, the management has to consider the facts on ground to resolve the deficiencies so that next year, the same point is not raised.