Question: What Is The Difference Between Statutory Audit And External Audit?

Is statutory audit and external audit same?

Statutory Auditors are a part of the external audit process are focused on the various financial accounts or risks associated with the domain of finance and are appointed by the shareholders of the company.

The external audit is related to the reports on financial statements of the corporate entity..

What is the turnover limit for statutory audit?

The Act states that if the turnover of any enterprise is more than 1 crore, and in case of professionals if the value of services is more than Rs. 50 lacs then they have to get their books of accounts audited by a Chartered Accountant.

What are the examples of non statutory record?

Non-statutory records are of private use to schools that find them useful. These include: cash book, stock book, punishment book, school calanedar, inventory book, staff minutes book, school magazine, inspection/supervision report file, confidential report forms and requisition book.

What is meant by a statutory body?

Statutory bodies are established by acts which Parliament and State Legislatures can pass. These bodies are entities shaped by an Act of Parliament or state legislatures and set up by the government to consider the data and make judgments in some area of activity.

How do I get a bank statutory audit?

The following procedure will be followed for appointment of Statutory Branch Auditors (SBAs) in Public Sector Banks (PSBs): The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.

How do you pass an audit?

8 Tips to Help You Pass Compliance AuditsPerform a Self-Compliance Audit. … Identify Users Accessing Shared Credentials. … Ensure You Have a Compliance Audit Trail. … Monitor Activity of Privileged Users, Business Users & Vendors. … Stay Tuned to Security Events Within Your Industry. … Watch Out for New Regulations.More items…•

What is difference between statutory audit and tax audit?

Statutory Audit is applicable to all the Companies registered under Companies Act 2013 and erstwhile Companies Acts. Tax Audit is applicable on all Companies, LLP’s, Partnership Firms as well as Individuals or Professionals whose turnover or Gross Receipts crosses the threshold limit.

What is the tax audit limit for AY 2020 21?

NOTE: The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2020-21 (FY 2019-20) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.

What is the role of external audit?

The primary role of external auditors is to express an opinion on whether an entity’s financial statements are free of material misstatements.

What are the types of external audit?

Major types of audits conducted by external auditors include the financial statements audit, the operational audit, and the compliance audit.

What do you mean by statutory audit?

A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records. An audit is an examination of records held by an organization, business, government entity, or individual, which involves the analysis of financial records or other areas.

How statutory audit is done?

A statutory audit can be defined as a legally required review that is performed to check the overall accuracy of a company’s financial records and statements. … It is performed by closely examining accounting information from bookkeeping records, bank balances and financial transactions.

Is tax audit mandatory in case of loss?

A. It depends on several conditions, If Loss occurred and Total Taxable Income is below threshold limit (2.5 lakh for non senior citizen and 3 lakh for senior citizen), No Tax Audit required. If Loss occurred in Business and Total Taxable Income exceeds threshold limit, Tax Audit required.

What companies need to be audited?

A company must have an audit if at any time in the financial year it has been:a public company (unless it’s dormant)a subsidiary company within a group which is not small.an authorised insurance company or carrying out insurance market activity.involved in banking or issuing e-money.More items…•

What is the difference between statutory audit and non statutory audit?

While statutory audits are primarily concerned with financial activities, non-statutory audits are not limited to financial reporting. A non-statutory audit can be conducted for any function of an organization. … PKF Sejong provides independent audit assurance that is tailored to meet your auditing requirements.

What is meant by external audit?

An external audit is an independent examination of the financial statements prepared by the organisation. It is usually conducted for statutory purposes (because the law requires it).

What are the 3 types of audits?

What Is an Audit?There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits.External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.More items…•

Who is eligible for statutory audit?

A person who is a partner with an employee of the company or employee of a company employee; Any person who is indebted to a company for a sum exceeding INR 1,000 (US$14) or who have guaranteed to the company on behalf of another person a sum exceeding INR 1,000 (US$14);

What are the features of statutory audit?

Salient Features of Statutory AuditStatutory audit has been made compulsory bylaw.Its scope is also determined by the law. … The Companies Act, 1956 has prescribed qualifications for a statutory auditor. … Similarly the law has also laid down the rights, duties and liabilities of the statutory auditor.More items…

What is the main purpose of external audit?

The objective of an external audit of financial statements is to determine whether, in the auditor’s opinion, the statements present fairly in all material respects – that is, they show a true and fair view in all material respects of the company’s financial position, results of operations, and cash flows, in …

What is the audit process step by step?

The Audit ProcessStep 1: Define Audit Objectives. Prior to the audit, AMAS conducts a preliminary planning and information gathering phase. … Step 2: Audit Announcement. … Step 3: Audit Entrance Meeting. … Step 4: Fieldwork. … Step 5: Reviewing and Communicating Results. … Step 6: Audit Exit Meeting. … Step 7: Audit Report.