Statutory audit

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Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2013 what is the difference between statutory audit and tax audit what type of audit comes in statutory audit

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 February 2013 statutory audit is the audit (normally annual) prescribed under the statutes under which the functioning of a particular organization is governed.

For ex: statutory audit for companies mean audit conducted by statutory auditors appointed under section 224 for ensuring compliance with 211(3C)

tax audit on the other hand derives its source from Section 44AB of the Income-tax Act, 1961 and is mandatory for only those assessees as prescribed therein.

Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2013 could u tell me about sec 224 and 211(3c)

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Sure! Here's a brief explanation of **Section 224** and **Section 211(3C)** of the **Companies Act, 1956** (which were relevant before the Companies Act, 2013 came into force):

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### **Section 224 of the Companies Act, 1956**

* **Appointment of Auditors:**
This section deals with the appointment of auditors in companies. It specifies that every company shall appoint an individual or firm as its auditor(s) at the Annual General Meeting (AGM).

* **Qualifications and Disqualifications:**
It includes provisions regarding the qualifications required and disqualifications for appointment as an auditor.

* **Term of Appointment:**
Auditors hold office from the conclusion of one AGM until the conclusion of the next AGM.

* **Filing with ROC:**
Details about filing the appointment with the Registrar of Companies.

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### **Section 211(3C) of the Companies Act, 1956**

* **Preparation and Auditing of Financial Statements:**
This section mandates that the accounts of the company shall be audited by an auditor who shall examine the accounts and certify them to be true and fair.

* It gives the **statutory basis for audit of company accounts** ensuring that the financial statements provide a true and fair view of the company's financial position.

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### Summary:

| Section | Description |
| ----------- | ------------------------------------------------------------------------------------ |
| **224** | Appointment of statutory auditors by companies at AGM |
| **211(3C)** | Statutory requirement for audited financial statements presenting true and fair view |

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### Connection with your question:

* **Statutory Audit:**
Under these sections, companies must get their financial statements audited by a statutory auditor appointed as per Section 224, who then certifies accounts as per Section 211(3C).

* **Tax Audit:**
Separate from these provisions, governed by Section 44AB of the Income Tax Act, 1961, which is about audit from an income tax perspective.

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Let me know if you want me to explain the current provisions under Companies Act, 2013 as well!

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