Statutory Audit IN India

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Statutory Audit

A Statutory Audit is a legally required audit of a company’s financial statements to ensure accuracy, transparency, and compliance with the Companies Act, 2013. It is conducted by a Chartered Accountant (CA) or an Audit Firm who is independent of the company.

This audit provides assurance to shareholders, investors, banks, and regulators that the company’s accounts show a true and fair view of its financial position.

Applicability of Statutory Audit

  • Verify accuracy of financial statements (Balance Sheet, P&L, Cash Flow)
  • Ensure compliance with Companies Act, Accounting Standards & other laws
  • Detect and prevent fraud, errors, and misstatements
  • Build credibility and trust with stakeholders
  • Facilitate loans, investments, and tenders

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Benefits of Statutory Audit

• Legal compliance under Companies Act • Enhances financial credibility & investor confidence • Ensures transparency & accountability • Detects errors, frauds & mismanagement • Helps in smooth business expansion & funding • Builds trust with banks, NBFCs, and government authorities

Frequently Asked Questions

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Only a Chartered Accountant (CA) or CA Firm, appointed as the company’s auditor.

Yes, even a small private limited company or OPC must get its accounts audited annually.

Directors/officers can be fined ₹25,000 to ₹5,00,000, and the auditor may face penalties too.

Within 30 days of incorporation in the first AGM, and then every 5 years (subject to reappointment rules).

Auditor’s opinion on whether accounts give a true & fair view of financial position as per law.

Yes, conversion is possible through MCA by following the prescribed process.