Question

Statutory Audit means an audit which is compulsory by any statute. The following audits falls in the category of statutory audit?

• A. Audit of financial accounts of companies is mandatory under the company's Act.
• B. Under Sec.233-A, of company Act, the Central Government may direct special audit of the accounts of the company.
• C. Under Sec.233-B, the Central Government may direct audit of cost accounts of a company to be conducted by cost accountants.
• D. Under Sec. 44-AB of Income Tax Act, Tax Audit is compulsory (i) in case of business where total sales in any year exceed Rs.40 lakhs and (ii) in case of profession - gross profectional receipts in any year exceed Rs. 10 lakhs.
• E. All of the above

Answer 1

Answer: (E)

All of the above

A statutory audit is a legal requirement. The purpose of the statutory audit is the same as the purpose of other audits. It is to determine that the organization is giving a true and fair view of its financial position by examining its balance sheet items such as bank balances, book keeping records and financial records.

The term statutory is used to denotes that the audit is required by the statute. A statute is a law or regulation which makes a rule for having such audits.

Considering the above facts, in all given circumstances the audits falls under the category of statutry audit.