Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Purpose and audience
A statutory audit is mandated by law and exists to give shareholders, lenders and regulators independent assurance that the financial statements are true and fair. An internal audit serves management — it examines whether processes and controls are working and where risks or inefficiencies lie.
Who, when and scope
The statutory audit is done by an external, independent CA, once a year, focused on the accounts. The internal audit is ongoing (monthly/quarterly), can be done by in-house staff or an outsourced firm, and ranges across operations — procurement, inventory, payroll, compliance. For some companies internal audit is itself mandatory — confirm.
How they work together — an example
Example: a company’s internal audit finds through the year that purchase approvals are being bypassed and fixes the control; the statutory auditor then relies partly on that strengthened control when forming an opinion on the year-end accounts. Good internal audit makes the statutory audit smoother and the numbers more reliable. Our team can provide internal audit and statutory audit (where independence permits).