Statutory Audit and Tax Audit

What is the meaning of statutory audit?

A statutory audit is conducted mandatory according to law to review the accuracy and transparency of the companies financial statements and records.

Who should be carrying out statutory act?

All the companies registered under Companies Act, 2013 needs to do statutory audit.

What is the meaning of tax audit?

A tax audit is the process of verifying the financial records of assesses to determine their accurate taxable income.

Who conducts the work of tax audit?

A practising Chartered Accountant performs the tax audit of the companies and individuals.


Difference between Statutory Audit and Tax Audit

“Statutory Audit” and “Tax Audit” are two essential types of audits that any company must go through. While both audits involve the examination of financial records, their objectives, scopes, and the entities involved differ significantly. Statutory audits focus on financial statement accuracy and compliance with accounting standards, while tax audits focus on tax compliance and the correct calculation of taxes owed by the taxpayer.

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What is a Statutory Audit?

A Statutory Audit is a legally required examination of a company’s financial statements and records to ensure accuracy and compliance with applicable laws and regulations. Statutory audits are typically conducted by independent certified public accountants (CPAs) or audit firms who are registered with relevant regulatory bodies. The objective of a statutory audit is to provide assurance to stakeholders, such as shareholders, creditors, and regulatory authorities, regarding the company’s financial health, integrity, and compliance with statutory requirements....

What is Tax Audit?

A Tax Audit is an examination of a taxpayer’s financial records and other relevant documentation by tax authorities to verify the accuracy and completeness of the taxpayer’s tax returns and compliance with tax laws. Tax audits are conducted by government agencies, such as the Internal Revenue Service (IRS) in the United States or the HM Revenue and Customs (HMRC) in the United Kingdom, to ensure that taxpayers are paying the correct amount of taxes owed under the law....

Difference between Statutory Audit and Tax Audit

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Conclusion

In summary, statutory audit and tax audit conducted for entirely different purposes. A statutory audit is a broder term as compare to tax audit. In addition, all the companies are required to perform statutory audit, however tax audit is only applicable to companies or professionals if they are subject to Income Tax Act rules....

Statutory Audit and Tax Audit – FAQs

What is the meaning of statutory audit?...