How to prepare for a Statutory Audit successfully
A statutory audit is a legal procedure that must be conducted to verify the accuracy of the financial statements and statements of an organization. It is done to evaluate the financial position of the company.
The overall objective of an audit is to form an independent and unbiased opinion on the information presented in the financial statements whether that information reflects the true and fair view of the company’s financial position or not. Statutory audit increases the authenticity and reliability of the financial statements.
Government entities conduct a legal audit of their companies to determine if the company provides reasonable and accurate financial information to the public. Before an audit process, businesses need to properly organize their documents in compliance with the accepted standards.
Auditors are required to follow International Standards on Auditing issued by the International Federation of Accountants through the International Auditing and Assurance Standards Board when performing annual financial audits of any company. During the course of the statutory audit, the management must respond to the auditors. As a result, it is critical to prepare yourself and keep everything in order.
The following things shall be taken care by the management to be prepared for statutory audit:
- Resolve all the conflicts reported by the internal auditor in the internal audit report
- Ensure that the modifications made by the previous auditor in his statutory audit report are solved now
- Maintain proper accounts using a reliable accounting software/ assign the accounting task to an accounting firm
- Keep all the necessary documents such as the trial balance, VAT returns, important ledgers, business contracts, legal documents ready
- Ensure that the payroll records are accurate & are in compliance with the standards
- The auditor will check the bank balance with supporting statement(s). The documents associated with each of the accounts need to be presented to the auditor at the time of audit
- All the documents related to incorporation of the company must be readily available during the process of the audit. The MOA, AOA, TRN, Shareholders register and any other details requested by the auditor shall be made available for his perusal.
- All the transactions recorded in the books shall be backed by invoices. The auditor will verify the amount in the invoice with the one recorded in the books.
It is difficult for an entity to prepare the financial statement and be prepared for external audit on its own. It is because, complying with the requirements of external audit is very time consuming. Improper maintenance of accounts may lead to difference in the opinion of the external auditor which may be different had proper accounts are maintained. It is no wonder that the business entities may not be aware about the complete set of audit requirements.
Every entity may not deploy competent accounts team to prepare for year end audit. Absence of proper accounting software to generate reports for year and financial audit is another difficulty for the entities. Hence, it is always advised to hire an audit firm, who will provide efficient audit preparation services.
KGRN & Co., Chartered Accountants is well known for its efficiency in service rendition and affordable fee that we charge which is in line with our efficient service.
KGRN CHARTERED ACCOUNTANTS, offer Audit services in Dubai, UAE. Our team of professional experts help you to get ready for external audit. We are having several years of experience in providing audit preparation services. Hence, you can assign the audit preparation service to us and concentrate on your core business activities.
Since, we have good experience, we will provide high standard of audit preparation service to satisfy your requirements of getting prepared for external audit. We will supervise the audit preparation process by experienced professionals in order to improve the efficiency of our service.
KGRN & Co., Chartered Accountants is well known for its efficiency in service rendition and affordable fee that we charge which is in line with our efficient service.
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