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What Is The Difference Between Statutory Audit And Non-statutory Audit?

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Elica Zadeh Profile
Elica Zadeh answered

Hello,

Thanks for your question. With regards to the differences between statutory audit and non-statutory audit, the first thing to note is that statutory means something that is legally required. Therefore, in it's most simple terms, we can say that statutory audit is something which is legally compulsory, where as non-statutory audit refers to an internal audit that is deemed necessary by the company. To break it down even further:

  • Statutory audit

Legally required as a means of inspection for a company's archive of records. The purpose of this is in order to ensure that a company is supplying correct numbers and figures and thus demonstrating a fair representation of it's finances.

  • Non-statutory audit

This is, generally speaking, an internal audit, conducted by the head of the company itself. It is done not only as a means of keeping it's financial position in check, but also in order to provide factual data about it's position to other affiliates or investors. The key difference here is that a non-statutory audit is not legally required.

I hope this answers your question.

Anonymous Profile
Anonymous answered

statutory audit

for external use by staeholders e.g gvt, financial institutions

non statutory audit

for internal use by management for the planning and making daily organisational decisions.

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