Statutory Audit – Applicability & Forms

A Statutory Audit is a legally mandated audit of a company’s financial statements to ensure accuracy, transparency, and compliance with applicable laws and accounting standards. It is conducted by an independent Chartered Accountant as per the provisions of the Companies Act, 2013, and other relevant laws.

✅ Applicability of Statutory Audit

Statutory audits are mandatory for certain types of entities, depending on their legal structure, turnover, and regulatory requirements:

1. Companies (Private and Public)

• All companies registered under the Companies Act, 2013, whether private limited, public limited, One Person Company (OPC), or Section 8 companies, must undergo a statutory audit, regardless of their turnover or profit/loss.
• Applicable from the very first financial year after incorporation.

2. Limited Liability Partnerships (LLPs)

• Statutory audit is mandatory if:
  • Annual turnover exceeds ₹40 lakhs, or
  • Capital contribution exceeds ₹25 lakhs
• Conducted as per the LLP Act, 2008.

3. Trusts, Societies & NGOs

• Required if:
  • Registered under Income Tax Act (for claiming exemptions under sections 11, 12).
  • Receive foreign contributions (FCRA compliance).
  • Required under state laws or bye-laws.

4. Entities Registered under Other Laws

• Co-operative societies, housing societies, and educational institutions may be subject to statutory audits under respective state laws or regulatory authorities.

STATUTORY AUDIT

Statutory Audit Forms & Filings

Depending on the type of entity and the law governing it, different forms are used in the statutory audit process:

Note: In addition to statutory audit, companies may also be subject to tax audits, internal audits, and cost audits, based on thresholds and sector.

🎯 Why Statutory Audit is Important

• Ensures transparency and reliability of financial statements
• Builds stakeholder confidence (investors, banks, regulators)
• Helps detect fraud, errors, and financial misstatements
• Ensures compliance with legal and regulatory norms
• Mandatory for loan applications, tenders, and fundraising