Statutory Audit is an independent examination of the financial statements of an entity conducted to form an opinion on whether the statements present a true and fair view in accordance with the applicable financial reporting framework and statutory requirements. It is mandated for companies under the Companies Act, 2013 and for certain other entities under relevant statutes.
Scope of Statutory Audit
The audit covers the complete set of financial statements and supporting records:
Examination of Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement
Verification of assets, liabilities, income and expenditure
Review of accounting policies and estimates
Assessment of internal financial controls over financial reporting
Compliance with Companies Act, Ind AS / Accounting Standards and other applicable laws
Audit Approach
A risk-based methodology is applied:
Understanding of the entity and its environment
Evaluation of internal control systems
Substantive testing of transactions and balances
Analytical procedures and subsequent events review
Formation of audit opinion and reporting
Reporting Outcomes
The engagement results in an independent auditor’s report expressing an opinion on the financial statements together with observations on internal controls and statutory compliance where applicable.