What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Independent examination of financial statements and accounting records.
- Assessment of material financial reporting risks and relevant internal controls.
- Identification of accounting errors, unusual transactions, and potential control weaknesses.
- Review of compliance with applicable statutory and accounting requirements.
- Improved reliability and credibility of financial statements.
- Audit reporting for shareholders, regulators, lenders, and other stakeholders.
- Practical observations to help management strengthen financial reporting and controls.
How the engagement works
Statutory audit requirements depend on the legal status and nature of the entity. For companies covered by the Companies Act, 2013, statutory audit requirements are primarily governed by the applicable provisions of the Act, including provisions relating to appointment, powers, duties, reporting, and audit of financial statements. Audits are conducted in accordance with applicable Standards on Auditing issued by the Institute of Chartered Accountants of India (ICAI), along with the relevant accounting standards and other applicable regulatory requirements.
Scenario 1: A company is required to undergo an annual statutory audit under the applicable provisions of the Companies Act.
Scenario 2: Management wants an independent examination of financial statements before presenting them to shareholders, lenders, investors, or other stakeholders.
Scenario 3: A growing business wants to strengthen its accounting controls and identify financial reporting risks through an independent audit.
Scenario 4: A company requires statutory audit reporting and compliance support before completing its annual financial and regulatory filings.
Scenario 5: Stakeholders require independently audited financial statements for financing, investment, regulatory, or corporate governance purposes.
Audit Planning & Risk Assessment
We understand the entity’s business, financial environment, accounting systems, and key risks and develop an audit approach based on the nature and complexity of the organization.
Financial Statement Examination
We examine the financial statements and supporting accounting records, including income, expenses, assets, liabilities, equity, and relevant disclosures.
Internal Control Review
We evaluate relevant internal financial controls and accounting processes to identify weaknesses or areas requiring management attention, as applicable to the audit.
Transaction & Balance Verification
We perform appropriate audit procedures on material transactions, account balances, supporting documents, reconciliations, and other evidence required to form an audit opinion.
Statutory Compliance Review
We review relevant statutory and regulatory matters that may have a material impact on the financial statements and audit reporting.
Audit Reporting
We complete the audit procedures and prepare the applicable statutory audit report and related communications in accordance with the applicable legal and professional requirements.
Step-by-step process
Step 1: Business & Audit Planning
We understand the entity’s business operations, accounting systems, financial reporting environment, and key areas of audit risk and establish the audit plan.
Step 2: Records & Internal Control Review
We examine accounting records and relevant internal controls to determine the appropriate audit procedures and identify significant areas requiring attention.
Step 3: Audit Procedures & Verification
We perform appropriate substantive and analytical procedures, verify selected transactions and balances, and evaluate supporting evidence.
Step 4: Financial Statement Review
We review the financial statements, accounting policies, disclosures, and identified audit matters and discuss significant observations with management.
Step 5: Audit Finalization & Reporting
We complete the required audit procedures, resolve outstanding matters, finalize the audit documentation, and issue the applicable statutory audit report.
Key deliverables & outputs
General questions
01What is a statutory audit?
A statutory audit is an independent examination of an entity’s financial statements and accounting records required by applicable law. The objective is to enable the auditor to express an opinion on the financial statements based on the applicable auditing and reporting requirements.
02Who needs a statutory audit?
The requirement depends on the entity’s legal structure and the applicable law. Companies covered by the Companies Act, 2013 are generally subject to statutory audit requirements, while other entities may have audit requirements under different laws or regulations.
03What is checked during a statutory audit?
Audit procedures may cover financial statements, accounting records, transactions, assets, liabilities, income, expenses, reconciliations, internal controls, statutory matters, and financial statement disclosures, depending on the nature and risk profile of the entity.
04How long does a statutory audit take?
The duration depends on the size and complexity of the entity, quality of accounting records, transaction volume, internal controls, availability of supporting documents, and applicable reporting requirements.
05What documents are required for a statutory audit?
Documents may include trial balance, general ledger, financial statements, bank statements, invoices, agreements, fixed asset records, loan documents, statutory registers, tax records, reconciliations, and other supporting information relevant to the audit.
06Will the auditor identify every error in the accounts?
An audit is designed to obtain reasonable assurance that the financial statements are free from material misstatement. Audit procedures are performed based on applicable standards and professional judgment and are not designed to guarantee detection of every individual error or irregularity.
07Can you also help with tax audit and Income Tax compliance?
Yes. Where applicable and subject to professional requirements, we can coordinate statutory audit-related financial information with tax audit, Income Tax Return preparation, and other relevant compliance activities.