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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.
A company that has no accounting transactions for the financial year in question or has not started Business since its corporation
A private company in the shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than 20 members OR Any private company, being a private company that is wholly-owned by the Government, which the Minister, in the national interest, declares by notification in the Gazetteto be an exempt private company
Statutory Audit is Compulsory by law
Following Documentary Evidences are require to be verify for A Statutory Audit opening balance verification vouching cash vouching bank vouching cash verification bank reconciliation statement purchase vouching sale vouching journal vouching
statutory audit is an audit whcih is conducted by a person or a firm in whcih all the partners are member of ICAI and holding Certificate of practice, statutory auditor is basically responsible for reporting on mistakes , errors which they find during the course of audit.