Question: What Is The Difference Between Statutory Audit And Non Statutory Audit?

What are the disadvantages of audit?

Demerits or Disadvantages of Auditing:Extra cost: Testing involves the extra cost to the organization which is considered a burden.

…Evidence: …Harassment of staves: …Unsuitable changes: …Chances of fraud: …Small concerns: …Problems in remedial measures: …Insufficient considerate:.

What are the 3 types of audits?

What Is an Audit?There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits.External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.More items…•

What is the difference between statutory and non statutory?

Non-uniformed statutory services can be: schools and education, council services and other legal aid are required by law to be in place. … Non-statutory services support statutory services, some of them are voluntary and are not funded by the government, so they have to cover their expenses by donations from people.

Which audit is not a statutory requirement?

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

What are the examples of non statutory record?

Non-statutory records are of private use to schools that find them useful. These include: cash book, stock book, punishment book, school calanedar, inventory book, staff minutes book, school magazine, inspection/supervision report file, confidential report forms and requisition book.

What are the advantages of non statutory audit?

Since nonstatutory audits are at the discretion of the business, they can have several advantages.Flexibility in Reports. Nonstatutory audits are not limited to financial reporting; they can cover any area of the business. … Consulting Services. … Flexibility in Advisors. … Verification.

What are the features of statutory audit?

Salient Features of Statutory AuditStatutory audit has been made compulsory bylaw.Its scope is also determined by the law. … The Companies Act, 1956 has prescribed qualifications for a statutory auditor. … Similarly the law has also laid down the rights, duties and liabilities of the statutory auditor.More items…

Who are the auditors?

An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws.

What is statutory audit in banks?

Statutory audit of banks can be defined as an audit to ensure that the financial statements and books of account presented to the regulators and the public are fair and accurate. It is an audit that is prescribed by a different statute such as Income Tax, Reserve Bank of India, Companies Act and so on.

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. This type of audit is not conditional, it depends upon the entity type.

What are non statutory financial statements?

‘Non-statutory accounts’ are accounts or other published financial information that are not the company’s statutory accounts (e.g. simplified accounting information such as an account in any form claiming to be a balance sheet or profit and loss account relating to the financial year of a company or group).

What is the difference between statutory audit and external audit?

Statutory audit is an external audit that is conducted by an audit firm or individual external to the organisation. … One of the key differences is that statutory auditors report to the shareholders of the company, whereas internal auditors report to management of the Company.

What are the advantages of statutory audit?

The following benefits are offered by a statutory audit:It assures the management that their duties in statutory performed perfectly.Statutory audit improves the reliability of the published financial statement.It provides internal control’s efficiency.More items…•

What is meant by a statutory body?

Statutory bodies are established by acts which Parliament and State Legislatures can pass. These bodies are entities shaped by an Act of Parliament or state legislatures and set up by the government to consider the data and make judgments in some area of activity.

How do I start a statutory audit?

1) First you examine Documentary Evidences regarding appointment/reappointment of an Auditor. 2) Examine Last Year’s copy of Audited Balance sheet, profit & loss account , schedules, notes on accounts along with 3CA/3CB, 3CD & Audit Report. 3) Carefully Examine the internal control system of the company.

What is a non statutory audit?

Non-statutory audit is a type of audit which is not legally required. While statutory audits are primarily concerned with financial activities, non-statutory audits are not limited to financial reporting. A non-statutory audit can be conducted for any function of an organization.

What’s the meaning of statutory?

1 : of or relating to statutes. 2 : enacted, created, or regulated by statute a statutory age limit.

What is the meaning of 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 do you mean by non statutory body?

Non-statutory is essentially another term for common law. Therefore such bodies are formed by executive resolution or action, which means that they are formed only by the Government’s action.

Who is liable for statutory audit?

Meanwhile, a limited liability partnership (LLP) has to undergo a statutory audit only if its turnover in any financial year exceeds INR 4 million (US$55,945) or its capital contribution exceeds INR 2.5 million (US$34,963).