Audit

my question are as follows:

Why private company choose to conduct internal audit of its financial statements and spend money as it is not mandatory.

Further they also choose to conduct statutory audit of its financial statements and spend huge money on it.As we know that statutory auditor reports to shareholders and in private company there is only max 50 members and they are relatives and friends,so why spend money in conducting st audit they can know there internal control weakness when they have conducted Internal audit of their financial statements..Please help me out, having difficulty with above.

Replies (2)

Dear Sanju

Statutory Audit is mandatory by Govt for companies (with prescribed limit). so we can not avoid this may be A pvt Company has only 2 members.

 

Internal Audit is like the same as we wear good clothes, having good mobile / vehcile. Means to say that to catch the fraud or loopholes of the company if any is there. This help us to run the business as smooth & grow the business.

 

A Director / Manager can not catch every fraud / person who is doing it but by internal Audit its easy to catch because it happens on timely basis.

 

Reards

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