Businesses conduct different types of audits to get an in-depth understanding of their operations. While some of these audits are optional, others are mandatory. A statutory audit is one such mandatory audit for businesses registered in India. So, choosing reputed statutory audit services for conducting these audits is very critical. With the right kind of service provider, not only can you be confident of meeting regulatory requirements but also ensure you are on the right path to drive success.
At PKC Management Consulting, we take pride in our approach of going beyond simply providing statutory audits. We believe that our role as auditors is to add value to your businesses by providing insightful and actionable feedback based on our findings. So, our team of professionals uses a combination of deep industry knowledge and the latest technology and techniques to conduct thorough audits that also identify areas of risk and growth opportunities for your business.
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What is a Statutory Audit & What are its Objectives?
A statutory audit is a type of audit that is required by law to verify the accuracy and completeness of a company’s financial records and statements. They are meant to reflect the company’s actual financial position and performance. A statutory audit cannot be conducted by an auditor affiliated with the company being audited. Therefore, the company undergoing the audit must onboard external and independent statutory auditor services for this review.
The three main objectives of a statutory audit are:
- Ensure that the company’s financial statements comply with the relevant accounting standards, legal requirements, and regulatory guidelines. This includes ensuring that the company is following appropriate accounting principles and revealing all financial information.
- Provide stakeholders with an independent and objective opinion on the accuracy and fairness of the company’s financial statements. This provides them the confidence and information they need to make informed decisions.
- Identify potential areas of risk or inefficiency in the company’s financial operations. This includes assessing the effectiveness of the company’s internal controls and risk management processes.
Statutory Audit Requirements For Businesses in India
In India, the Companies Act, 2013, and Companies (Audit and Auditors) Rules, 2014 make it mandatory for all public and private limited companies to undergo a statutory audit. The requirement is applicable for all kinds of businesses irrespective of their nature, capital or turnover.
Apart from the public and private limited companies, other types of companies are also subject to audit if they meet the following conditions:
- Limited Liability Partnership (LLP): Their accounts must be audited if they have an annual turnover of 40 lakhs INR or more OR 25 lakhs INR or more capital contribution in the financial year.
- Proprietorships and Partnership Firms: Tax audit is required for these firms if turnover exceeds 1 crore INR or if the gross annual receipts in terms of a profession exceed 25 lakhs INR.
Key Requirements for Businesses Subject to a Statutory Audit
- Audit must be conducted annually and completed within a specified timeframe
- The auditor must be a qualified Chartered Accountant (CA) registered with the Institute of Chartered Accountants of India (ICAI)
- It must cover various financial aspects of the company – balance sheet, profit and loss statement, cash flow statement, and notes to the financial statements.
- Auditor must provide an opinion on the accuracy and fairness of the financial statements.
- The audit report must be submitted to the company’s Board of Directors and filed with the Registrar of Companies.
In case a company fails to comply with the statutory audit requirements, the authorities can impose penalties, fines, and initiate legal action.
Advantages PKC’s Statutory Audit Services Can Have For Your Business
PKC’s statutory audit services can offer several benefits to businesses, including:
Trusted Professional Expertise
With more than 35 years in business, PKC Management Consulting has become a trusted name for statutory audit services. You can count on our team of experienced CAs for expertise in accurate auditing and accounting no matter what industry you are in.
Financial Management
Our audits can identify areas where there is scope for improvement, such as streamlining processes or reducing costs. By making these improvements, you can become more efficient and effective in managing finances, resulting in increased profitability and long-term sustainability.
Ensured Compliance
PKC’s statutory audit services can help businesses ensure compliance with applicable laws, regulations, and accounting standards. By conducting a thorough review of financial records, we identify any areas where your business may be falling short in terms of compliance, helping to mitigate the risk of penalties or legal action.
Enhanced Stakeholder Confidence
An audit with a reputed firm like PKC Management Consulting can enhance stakeholder confidence in your business. With investors, lenders and other stakeholders being more confident in your financial position, you benefit by getting access to funding opportunities, improved credit ratings, etc.
Identification of Risks & Opportunities
Our rigorous audits can identify potential areas of risk or inefficiency in your business’s operations, as well as opportunities for growth and expansion. By leveraging these insights, you can make informed decisions about its future direction and take proactive steps to mitigate risks and build on opportunities.
Timely Support & Advice
Our team of professionals can offer guidance and support on a range of financial matters, including compliance, risk management, and financial strategy. This can be particularly valuable for businesses facing complex financial challenges or looking to make important strategic decisions.
Overall, statutory audits are not only mandatory but also important for ensuring the integrity of financial reporting and maintaining confidence in the financial markets. Choose a provider like PKC Management Consulting to get the best services.
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Frequently Asked Questions (FAQ)
In India, it is mandatory for all registered companies to undergo a statutory audit annually, as per the Companies Act, 2013. The audit must be conducted by a qualified and registered Chartered Accountant.
Yes, failure to comply with the statutory audit requirements can result in penalties, fines, and legal action. So, it is important for all businesses to ensure compliance with the Companies Act and other regulatory bodies by choosing a reliable provider for statutory audit services.
A statutory audit typically reviews various financial documents, including the company’s balance sheet, profit and loss statement, cash flow statement, etc.
PKC’s statutory audit services cater to a wide range of industries. We conduct audits for companies related to manufacturing, retail, healthcare, real estate, education, technology, etc. .
The pricing of our services varies based on the size, complexity, and scope of audit. However, at PKC Management Consulting we are committed to providing transparent and competitive pricing to ensure that services are affordable.
