17 September 2013
Statutory audit for companies is mandated by section 224 of the Companies Act, 1956. A company is a separate legal entity and the equity to run the business of company is provided by a number of shareholders. So, audit of a company is required in order to provide an independent unbiased opinion on the financial statements of the company as these shareholders may not be competent enough to judge the true financial position of the company. Moreover, other stakeholders like creditors, taxation authorities etc. also rely on the audited financials.
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