Statutory Audit
Statutory audit under Companies Act 2013 defines that every business
must undergo auditing of their accounts for every financial year (April
1 - March 31), despite their capital or turnover. This Audit is required
to express an opinion thereon, which helps report and pick an accurate
and honest view of a company's financial position and operating result.
Statutory audit of companies : To perform statutory audit of
companies, the company directors appoints a third-party auditor as the
first step. Auditors are appointed at annual general meetings (AGM) of
various companies. The appointed auditor remains the same until the next
AGM. Under the Companies Act, 2017, auditors can be appointed for 5
years, except in individual and partnership firms where the appointment
period is a maximum of one or two terms. A third-party chartered
accountant or accounting firm can be appointed as the auditor of the
company.
The following list of peoples cannot be appointed as the auditor of
the company;
- An employee of the company.
- Partner of a company employee.
- Anyone owning an amount more than 1000/- to the company.
- Anyone who holds the company's securities or shares.