Statutory Audit

A statutory audit is an independent financial examination required by law to confirm that an organization’s accounts and statements are accurate and prepared in accordance with applicable accounting standards and regulations. It is mandatory for entities such as companies, government bodies, and financial institutions that fall under legal audit provisions. During a statutory audit, the auditor reviews all relevant financial documents, including ledgers, bank records, statements of income and expenditure, and tax filings. The objective is to provide an opinion on whether the financial statements present a true and fair view of the organization’s financial performance and position, and to detect any errors, fraud, or non-compliance.

Example: Under the Companies Act, 2013 (India), every registered company must undergo an annual statutory audit performed by a qualified Chartered Accountant (CA) to verify compliance with legal and financial reporting standards.