Practice Area 01
Statutory Audit
Overview
A statutory audit is an independent examination of financial statements, required by law rather than requested voluntarily, resulting in an auditor’s opinion on whether those statements present a true and fair view. For companies, it is conducted under the Companies Act, 2013 and the applicable Standards on Auditing issued by the ICAI.
Who needs it
Every company incorporated under the Companies Act, 2013 requires a statutory audit regardless of turnover or profit, as do most trusts, societies and Section 8 companies under their respective governing statutes.
Our approach
Audit fieldwork is planned around the entity’s risk areas and internal control environment, with substantive testing of significant balances and transactions, followed by a review of disclosures against Schedule III and applicable Accounting Standards before the audit opinion is finalised.
Deliverables
- Audited financial statements with the auditor’s report
- Management letter noting control observations, where relevant
- CARO reporting for companies, where applicable
Timeline
Typically planned around the entity’s financial year-end, with fieldwork scheduled well ahead of the AGM and statutory filing deadlines.
Frequently asked questions
Is a statutory audit compulsory for a small private company?
Yes. Unlike a tax audit, which has turnover thresholds, a statutory audit under the Companies Act applies to every registered company irrespective of size, turnover or whether it is dormant.
Can the same firm handle both statutory and tax audit?
Yes, subject to the independence and rotation requirements under the Companies Act and ICAI’s Code of Ethics, which the firm reviews for each engagement.