Statutory
Audit

    A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records. The term statutory denotes that the audit is required by statute. Being subject to a statutory audit is not an inherent sign of wrongdoing. Statutes can be enacted at multiple levels including federal, state, or municipal. In business, a statute also refers to any rule set by the organization’s leadership team or board of directors.

Section 143 of the Companies Act,2013 entails provisions regarding powers and duties of auditors. The statutory auditor shall present a report to the company’s shareholders on the Books of accounts and financial documents examined by him.

The purpose of a financial audit is often to determine if funds were handled properly and that all required records and filings are accurate. At the beginning of an audit, the auditing entity makes known what records will be required as part of the examination. A company being audited gathers and supplies information as requested, allowing the auditors to perform their analysis. If inaccuracies are found, appropriate consequences may apply.

Applicability of Statutory Audit

Not all firms have to undergo statutory audits. Firms that are subject to audits include public companies, banks, brokerage and investment firms, and insurance companies. Certain charities are also required to complete statutory audits.

 Tax Audit

Applicability of Statutory Audit

As per section 44AB, following persons are compulsorily required to get their accounts audited : A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore.

If the taxpayer has incurred loss or the profit is less than 6% or 8% of Turnover / Sales, , total income exceeds the basic exemption limit and taxpayer has opted out of presumptive taxation scheme in any of the previous 5 years, Tax Audit as per Sec 44AB(e) is applicable.

Tax audit affects revenue collection in that it promotes voluntary compliance of taxpayers which increases revenue. It also determines the accuracy of returns so as to ensure the right taxes are submitted. With tax audit tax liability can be easily declared and matters that need adjustment are identified. It also helps in collecting tax interests and penalties which thereby increase revenue collection. Tax audit also helps to implement changes to eradicate evasion. Thus, tax audit is positively related to tax collection.

What KSC Offers

We carry out Statutory and Tax Audits to ensure that your financial  statements present a true and fair view of financial positions and operational results in accordance with the  guidelines issued by Indian regulatory authorities.