What is a statutory auditor? The statutory auditor has an essential role in providing credibility to company statutory audit financial statements because users of financial statements regard the audit report as a guarantee of their reliability. Statutory auditing can be distinguished from the overall practice of public accountancy in that statutory auditing focuses on audits mandated by law and regulated by the state. While the avowed purpose for the regulation of statutory auditing is to protect the public interest, the way in which this purpose has been organized and articulated has varied from country to country. 

KEY TAKEAWAYS

• An audit is the study of documents held by a business, organization or government agency, as well as an individual. It includes the examination of financial records as well as other aspects.
• The goal for an audit of financials is usually to verify that funds were managed properly and if all documents and filings are correct.
• The companies which are audited are public companies, banks, investment, and brokerage firms, as well as insurance companies.

What is a Statutory Audit?

Statutory Audit definition is that it is an obligatory review of the accuracy of a government’s financial documents or of a company’s statements. The objective of a statutory audit is to determine if an entity provides an accurate and truthful depiction of its financial situation through the examination of information like balances of books, bank records along financial transactions. Hope you understand the meaning of statutory audit. Now let’s move onto the next phase.

How does it Work?

It is usually the study of financial records in various ways or other aspects. When conducting a statutory audit of companies, the company’s financial records, such as earnings or profits, investment returns expenditures, as well as other things could be considered in the audit procedure. Some of these are utilized when calculating the combined ratio.The goal for an audit of financials is usually to verify that funds were properly handled and to ensure that all files and records are in order. When beginning the audit process, an auditor determines what documents are required for the audit. The records are compiled and provided as required and allow the auditors to do their analysis. If errors are discovered, there are consequences that could be appropriate.

The Difference in Audits.

We are all aware that there are various kinds of Audits, and each one provides various results.Regulatory audit. is the audit of a specific product to discover if the regulations for the specific industry are being followed or not.Performance Audit. Involves analyzing the various ways to improve the effectiveness and efficiency of the business. Also, take decisions about the effectiveness of any method which is more beneficial for business.Statutory audit. Refers to the review of financial statements that are required by law.

Exempted Entities from Statutory Audit.

There are many firms that do not need to undergo audits as required by law. Companies that are subject to audits include banks, public companies as well as investment firms, brokerage firms, and insurance firms. Certain charities also have to conduct statutory audits. Smaller businesses are usually exempt from audits. They must be of an established size and base of less than 50 employees to be exempted from audits.

Necessities for Statutory Audit.

A company must have the following documents in place prior to starting a statutory audit:

• The details of the fixed asset, statements from banks that include the details of transactions in them as well as the specifics of cash receipts and payments
• The site provides information on both secured and unsecured advances and loans, Trade Receivables, and payables.
• Local purchases and import purchases.
• Sales and exports from the local area information.
• Information about the inventory, administration and selling costs.
• Information on foreign exchange earnings and expenses.
• Dues and other levies.

 Why WBS Is The Best?

WBS is a Dubai financial consulting firm that offers various services such as auditing, accounting VAT, tax consulting software, and management. We’ve been showing the top audit services within and around Dubai. Our audit team collaborates alongside you to ensure the health of your company. We use the most up-to-date auditing software to analyze and pinpoint any problems and offer the most efficient solutions.

If you require any statutory audits, Do get in touch with WBS. We’ll be glad to help!