Internal Audit & Statutory Audit

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2011
Dear Experts,

I am conducting the Internal Audit of Partnership firms & Ltd. company.
I want to know that:
1. What is the specific diff. between Internal & Statutory Audit?
2. What is the right way to conduct Internal Audit & what areas are to be audited?
3. What is our responsibility towards the clients i.e whether we have to comment on the B/S, P& L A/c etc, due dates of Statutory payments etc.?

Despite our regular efforts, the clients does not seem to be satisfied at the end by the work.How to conduct an efficient & result oriented Internal Audit?

Please reply early as its very urgent.
Thanks in Advance.

CA Sachin D Jain

CA Sachin D Jain (Expert)
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26 July 2011 Dear Author,

1. Statutory audit is governed by Statute, while internal audit is governed by expectation of management from internal auditor.

2. Internal audit should be conducted keeping in mind the objective for which you are appointed as an internal auditor. You should have a meeting with the senior management personnel of the Company / Firm, to decide what they want exactly from the audit. The best way is to jot down the points on which they want reporting. And ensure that all the points on which reporting is required are commented by you, either in a positive way or in negative way (if you found a discrepancy).

3. Again commenting on a particular point will be dependent upon the points on which the management wants reporting.

Lack of communication with the clients, lack of understanding about the objective with which the internal audit is conducted (from the point of view of management) etc. may be the reasons due to which your client is not satisfied.

So, always keep the above points in mind before initiating any internal audit.

IT HAS BEEN WELL SAID:

"GOOD PLANNING IS HALF THE JOB DONE" AND "PLANNING, BASED ON OBJECTIVE TO BE ACHIEVED, IS LIKE ACHIEVING THE OBJECTIVE"

Best of Luck.

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