What Is a Statutory Audit?
A statutory audit is a yearly check of a company’s or LLP’s financial statements by an independent Chartered Accountant, required by law. The auditor reads your books, tests the numbers and gives an opinion on whether the accounts show a true and fair view of your business. The result is an audit report that goes with your financial statements and is used for MCA filings, banks and investors.
Who Needs a Statutory Audit?
| Business type | Is a statutory audit required? |
|---|---|
| Private Limited Company | Yes, every year from the first year, even if turnover is zero |
| Public Limited Company | Yes, every year |
| One Person Company (OPC) | Yes, every year (the Companies Act applies to it) |
| LLP | Only when turnover or contribution crosses the set limits. Your CA confirms the current limits for you. |
| Partnership firm and proprietorship | No statutory audit. A tax audit may apply if you cross the income tax limits. |
Statutory Audit vs Tax Audit: What’s the Difference?
| Aera | Statutory audit | Tax audit |
|---|---|---|
| Law | Companies Act, 2013 (or LLP Act) | Income Tax Act, Section 44AB |
| Who needs it | All companies, and LLPs above limits | Businesses and professionals above turnover or receipts limits |
| Purpose | True and fair view of accounts | Check income tax compliance |
| Report | Auditor’s report on financial statements | Form 3CA/3CB with Form 3CD |
| Who files | Company with the MCA | Taxpayer with the income tax department |
What’s Included: Statutory Audit Services in Bhubaneswar
With statutory audit services in Bhubaneswar through WhereIsMyCA, the audit covers:
Reviewing your books, ledgers and supporting documents
Checking bank balances, loans, receivables and payables
Checking fixed assets, depreciation and stock (where relevant)
Testing sales, purchases and expense entries
Checking compliance with the Companies Act and accounting standards
Issuing the auditor’s report on your financial statements
Guidance on filing with the MCA
Statutory Audit Process: Step by Step
Appointment:
The company appoints the auditor and files Form ADT-1
Planning:
The CA understands your business and sets the audit plan
Records:
You share books, bank statements, invoices, agreements and loan papers
Testing:
The CA checks entries, balances and compliance
Questions:
Any differences are discussed and fixed with you
Draft:
You review the draft financial statements and findings
Report:
The auditor signs the Report
Filing:
AOC-4 and other forms are filed on time
Documents Needed for Statutory Audit
- Trial balance, profit & loss account and balance sheet (draft is fine)
- Ledgers and books of accounts
- Bank statements and bank confirmations
- Sales and purchase invoices and expense bills
- Loan agreements and statements
- Fixed asset register and depreciation details
- Stock details (for trading and manufacturing)
- GST returns and TDS returns
- Minutes of board meetings and shareholder meetings
- Statutory registers and previous year’s audited report
Common Mistakes to Avoid
Thinking a company with zero turnover does not need an audit
Not appointing the first auditor within 30 days of incorporation
Waiting until the last month to start, which leaves no time to fix errors
Using the same CA for the statutory audit and for the company’s bookkeeping. The law keeps these separate to protect independence.
Not keeping proper bank statements, loan papers and agreements ready
Missing the AOC-4 and MGT-7 filing dates, which can mean extra fees
Frequently Asked Questions
What is a statutory audit?
A yearly, independent check of a company’s or LLP’s financial statements, required by law, ending in an audit report.
Is a statutory audit mandatory for a private limited company?
Yes. Every private limited company must have its accounts audited every year, from the first year, even with zero turnover.
Is a statutory audit needed for an LLP?
Only if the LLP crosses the turnover or contribution limits set by the LLP rules. Your CA confirms the current limits.
What is the difference between a statutory audit and a tax audit?
A statutory audit checks if the accounts are true and fair under company or LLP law. A tax audit checks income tax compliance under Section 44AB.
When must the first auditor be appointed?
Within 30 days of the company’s incorporation, and reported through Form ADT-1.
Can the same CA do my bookkeeping and my statutory audit?
No. For independence, the auditor of a company should not provide its bookkeeping. These should be done by different CAs.
What happens after the audit?
The report is signed, the accounts are approved by the board and adopted at the AGM, and then AOC-4 and MGT-7 are filed with the MCA.