Statutory Audit

Mandate by regulating body to get the financial affairs and position to be examined independently by subject expert to express the opinion on regulated framework and guidelines implied thereon.

Meaning of a Statutory Audit

A statutory audit is a mandatory compliance prescribed by law of land to check the accuracy of the financial statements, which inter alia includes balance sheet, profit and loss, cash flow statement, notes to account and other supporting documents of an organization, collectively known as records of a company. 

A statutory audit is intended to determine if an organisation delivers an honest and accurate representation of its financial position by evaluating information, such as bank balances, financial transactions, and accounting records.

Independent practicing professional called Chartered Accountants on given set of rules and regulation applicable to them from Institute of Chartered Accountants of India and other law of land, can perform Statutory audit function. Company required to conduct audit of its financial statements irrespective of anything. Accordingly other firms, institution and entity based on its forming law or independent other law, required to perform the Audit function.  

In fact, it is sort of mandatory compliance to any sort of business organization in India to perform, annual audit by any practicing-chartered accountant of country in order to provide opinion on audited financial statement of organization.

A statute is a regulation or law enacted by the associated government of the organisation's legislative branch. In a company, a regulation also applies to any law set by the management team or board of directors of the organisation.

An audit is an examination of records held by an agency, company, government department, or individual. This usually involves analysing different financial records or other areas. 

The objective of a financial audit is often to assess whether funds have been properly handled and that all records and filings required are accurate. Undergoing a statutory audit is not an implicit indication of misconduct. Instead, it is also a formality intended to help discourage crimes, such as misappropriating funds by ensuring a professional third party routinely scrutinises various documents. The same applies to other audit forms too.

All of businesses structure and form are obliged to undergo mandatory audits by its own bye laws or its governing law given by Government. Audit need to be independent and professional need to carry it with its valid authorization to do so, precisely practising chartered accountant in India.