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What is Statutory Audit?
term “statutory” implies something brought into effect by law. Statutory Audits are conducted to verify genuineness of a company’s books of accounts, as mandated by Law. Such audits facilitate the stakeholders in making informed decisions.
How Does a Statutory Audit Function?
Statutory audit is a compliance applicable upon all the companies falling under the purview of The Companies Act, 2013. Under an audit, the books of accounts are validated by an independent external auditor following the rules and regulations prescribed by law in this regard.
While performing audits, the primary focus is upon analyzing financial records to identify fraudulent transactions such as misappropriation of funds. An audited company is always placed as more credible and tenable. Various aspects of financials such as expenditures, benefits, return on investment are examined while auditing to establish their viability from the point of view of different stakeholders like shareholders and government.
Who is required to undergo Statutory Audit?
Statutory Audit has been mandated for all the private limited companies and, also, for companies where government, be it Central or State or together, owns more than 50% of the stake. Currently, no threshold turnover limit has been defined for applicability of such audits.
Nevertheless, statutory audits for Limited Liability Partnerships (LLPs) are made subject to certain turnover and capital thresholds. LLPs exhibit the features of both corporations and a partnership firm. The provisions regarding statutory audit are prescribed in The Companies Act, 2013 and the Rules are laid down in Companies (Audit and Auditors) Rules, 2014.
Aplite renders audit services for all types of companies- Small companies, One person companies, Listed and Unlisted companies. Thus, we are a one-stop shop for all your auditing requirements.
Who can conduct a Statutory Audit?
Statutory audits are primarily conducted by practicing Chartered Accountants and their allied partnership firms. One of the most important aspect to note here is that the law has prescribed strict provisions to regulate the independence of auditors conducting audits for the companies. This is to ensure that the opinion expressed by auditors is free from bias and manipulations.
Aplite has a rich history in conducting statutory audits for its clients while keeping in mind strict quality controls and ensuring independence in every respect. We have always stood up to the expectations of our clients and never failed in pointing out any mal-functioning.
Penalty For Non-Compliance
The regulators have placed strict penal provisions for any non-compliance with Statutory audit provisions. Such fines can amount to INR 25,000, extendable to INR 5,00,000 along with imprisonment for a period of 1 year for directors and members.
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Benefits of Statutory Audit
- Statutory Audit involves preparation of financial statements of the companies, which helps in accurate representation of the company’s financial situation.
- An accurate depiction of a company’s financials paves the way for an easy debt and loan sanction procedure.
- It mitigates business and financial risk by determining the potential gaps in the books of accounts.
- A statutory audit provides a peek inside the internal control system of the organization.
It helps the management in reflecting the areas where the compliance requirements are to be fulfilled.
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Why Aplite?
Our professionals, at Aplite, work with you closely to understand your business and your requirements and make your experience more enriching. We employ latest tools and technologies in conducting your audit faster, while maintaining integrity. We understand our responsibility as your financial auditors, and undertake to fully conduct as the audit as per generally accepted auditing and accounting standards applicable in India.
We extend the benefits of our expertise and experience to all our clients through our audit services. Not only do we vouch for the accuracy of your books, but, our teams also guide you upon parameters to improve the functioning of your business. Our experts work as your team and ensure smooth conduct of the audit process.