Statutory Auditing Services in India – An Overview
While internal auditing services are carried out in organizations, we also need to understand that it is also essential for statutory auditing services to be carried out as well. Statutory auditing services are generally conducted by Chartered Accountants (CA). As such, every country would have its own laws for organizations when it comes to keeping financial records that will be presented with up to date evidential paperwork to the public and regulators.
In India, it is recommended by the Companies Act and other various laws including accounting and auditing standards, that statutory audits are conducted every financial year from the 1st of April to the 31st of March.
What is a Statutory Audit?
Statutory auditing can be defined as a legal process prescribed by a statute or a law that requires to review the accuracy of financial records reflected through a company’s financial statement. These auditing processes can be performed on a variety of levels depending on the requirements as all transactions are taken into account before the release of the final audit report.
Purpose of a Statutory Audit
The main purpose of a statutory audit is similar to any other types of audit, which is to determine whether a company or organization is providing a transparent and accurate representation of its financial position by examining information from bank balances, bookkeeping records, financial transactions and institutions, as well as firms and sole-proprietors.
If a company is being subjected to go through the processes of statutory auditing, this does not suggest that the company is committing fraud or non-compliances. On the contrary, it signifies that that particular company will be put through a controlled process to ensure that an accurate outlook of the company’s mismanagement or fraud assessment (if any), is given to prevent any malpractices and to also ensure an ethical and transparent system in conducting business. Thus, every company and governmental body is required to go through such statutory audits on regular intervals.
For that reason, an auditor or a Chartered Accountant (CA) would be hired to supervise the controlled processes of a statutory audit to ensure that all of the necessary steps are carried out properly.
The Two Most Common and Significant Types of Statutory Audits in India
- Company Audit: Governed by the Companies Act 2013, a company audit’s main purpose is to report the state of the company’s accounts & finance to the governing authority. Company audits are usually performed by qualified auditors.
- Income Tax Audit: Income tax audit under Section 44AB is mandatory for a certain class of taxpayers which relies on certain turnover and receipts limit. It is best if a company consults a Chartered Accountant (CA) to better understand if they are liable under the tax audit.
Services We Provide at 3E Accounting
At 3E Accounting, our dynamic team of professionals emphasizes proficiency and precision when it comes to delivering appropriate services to our clients. We strive to comprehend your business objectives so that we can provide the best statutory auditing services that ensure the sustainability and growth of your business in India. As such, our dedicated team of professionals will assist you to achieve your business goals with the best legal services to understand whether your company’s financial statements are represented in a true and unbiased point of view.