statutory audit
This query is : Resolved
18 August 2009
Suppose I have to do a Statutory audit of a company then what are the procedure or process i have to take to complete this task.Reply as soon as possible.also in case of tax audit.
18 August 2009
Hi,
Statutory Auditor is appointed by the shareholders at the annual general meeting under section 224 of the companies act, 1956.
As per section 224(5) first auditor is appointed by board of directors with in 1 months of regn of the company.
So before starting Statutory Audit make sure that your appointment is as per law.
Regards
Statutory Auditor is appointed by the shareholders at the annual general meeting under section 224 of the companies act, 1956.
As per section 224(5) first auditor is appointed by board of directors with in 1 months of regn of the company.
So before starting Statutory Audit make sure that your appointment is as per law.
Regards
18 August 2009
i want to know practically how to conduct the audit.
25 July 2025
Sure! Here's a practical step-by-step process to conduct a **Statutory Audit** of a company:
---
### Practical Steps to Conduct a Statutory Audit
**1. Appointment and Planning:**
* Confirm your appointment as statutory auditor (check resolution, appointment letter).
* Obtain the previous audit report and working papers (if available).
* Understand the company’s business, industry, and legal framework.
* Prepare an audit plan and schedule.
**2. Understand Internal Controls and Risk Assessment:**
* Review the company’s internal control systems.
* Identify areas of high risk (e.g., revenue recognition, inventory, cash).
* Assess control environment and decide on the nature, timing, and extent of audit procedures.
**3. Obtain and Review Documents:**
* Collect financial statements: balance sheet, profit & loss account, cash flow, notes.
* Check statutory registers and minutes of meetings.
* Obtain trial balance, ledgers, vouchers, and other accounting records.
**4. Conduct Audit Procedures:**
* **Verification of assets and liabilities:** physically verify fixed assets, inventory, bank balances, etc.
* **Check transactions:** vouch invoices, receipts, payments for authenticity.
* **Reconcile balances:** bank reconciliation, debtor and creditor confirmations.
* **Test controls:** sample testing of internal controls.
* **Analytical procedures:** compare ratios, trends with previous years.
* **Compliance check:** verify compliance with laws, tax filings, etc.
**5. Tax Audit (if applicable):**
* Check if the company is required to get a tax audit under Section 44AB.
* Verify books of accounts and income tax records.
* Cross-check tax payments, TDS, returns, and other tax-related documents.
**6. Review of Audit Findings:**
* Identify audit issues or discrepancies.
* Discuss significant findings with management.
* Ensure proper documentation of working papers for all audit tests.
**7. Draft Audit Report:**
* Prepare the audit report as per the Companies Act format.
* Include observations, qualifications (if any), and auditor’s opinion.
**8. Finalization and Submission:**
* Get the audited financial statements approved by the Board.
* File the audit report with ROC (Registrar of Companies).
* Submit copies to the company and shareholders.
---
### Key Points:
* Maintain professional skepticism throughout the audit.
* Follow the auditing standards issued by ICAI.
* Maintain confidentiality and independence.
* Document all audit evidence properly.
---
If you want, I can help you prepare a **detailed checklist** or **audit program** for statutory audit too. Would you like that?
---
### Practical Steps to Conduct a Statutory Audit
**1. Appointment and Planning:**
* Confirm your appointment as statutory auditor (check resolution, appointment letter).
* Obtain the previous audit report and working papers (if available).
* Understand the company’s business, industry, and legal framework.
* Prepare an audit plan and schedule.
**2. Understand Internal Controls and Risk Assessment:**
* Review the company’s internal control systems.
* Identify areas of high risk (e.g., revenue recognition, inventory, cash).
* Assess control environment and decide on the nature, timing, and extent of audit procedures.
**3. Obtain and Review Documents:**
* Collect financial statements: balance sheet, profit & loss account, cash flow, notes.
* Check statutory registers and minutes of meetings.
* Obtain trial balance, ledgers, vouchers, and other accounting records.
**4. Conduct Audit Procedures:**
* **Verification of assets and liabilities:** physically verify fixed assets, inventory, bank balances, etc.
* **Check transactions:** vouch invoices, receipts, payments for authenticity.
* **Reconcile balances:** bank reconciliation, debtor and creditor confirmations.
* **Test controls:** sample testing of internal controls.
* **Analytical procedures:** compare ratios, trends with previous years.
* **Compliance check:** verify compliance with laws, tax filings, etc.
**5. Tax Audit (if applicable):**
* Check if the company is required to get a tax audit under Section 44AB.
* Verify books of accounts and income tax records.
* Cross-check tax payments, TDS, returns, and other tax-related documents.
**6. Review of Audit Findings:**
* Identify audit issues or discrepancies.
* Discuss significant findings with management.
* Ensure proper documentation of working papers for all audit tests.
**7. Draft Audit Report:**
* Prepare the audit report as per the Companies Act format.
* Include observations, qualifications (if any), and auditor’s opinion.
**8. Finalization and Submission:**
* Get the audited financial statements approved by the Board.
* File the audit report with ROC (Registrar of Companies).
* Submit copies to the company and shareholders.
---
### Key Points:
* Maintain professional skepticism throughout the audit.
* Follow the auditing standards issued by ICAI.
* Maintain confidentiality and independence.
* Document all audit evidence properly.
---
If you want, I can help you prepare a **detailed checklist** or **audit program** for statutory audit too. Would you like that?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Difference between Date of Payment and Date of Deduction?
- Unregistered suppliers utility
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- TDS AND ITR ISSUE
- LIC maturity claim whether taxable
- Same demand raised for original as well as rectification request return
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
