A statutory audit is a legally required examination of a company’s financial records, statements, and transactions to ensure accuracy, transparency, and compliance with applicable laws and regulations. Here’s how we can assist your organization:
- Audit Planning and Preparation:
- Collaborate with your team to understand the nature of your business, industry risks, financial reporting processes, internal controls, and regulatory requirements.
- Develop a tailored audit plan, including risk assessment procedures, materiality thresholds, audit scope, testing strategies, and timelines to conduct the statutory audit effectively.
- Financial Statement Examination:
- Conduct a detailed examination of financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in equity, in accordance with relevant accounting standards (e.g., GAAP, IFRS).
- Verify the accuracy, completeness, and fairness of financial data, accounting treatments, disclosures, and related party transactions disclosed in the financial statements.
- Internal Control Assessment:
- Evaluate the design and effectiveness of internal controls over financial reporting to identify control weaknesses, deficiencies, or material misstatements in financial reporting processes.
- Test key controls related to revenue recognition, expense accruals, inventory valuation, fixed assets, financial close processes, IT system controls, and compliance with laws and regulations.
- Audit Procedures and Evidence Gathering:
- Perform substantive audit procedures, analytical reviews, variance analysis, reconciliations, and sampling techniques to gather audit evidence supporting the fairness and accuracy of financial statement assertions.
- Select appropriate audit samples for testing account balances, transactions, disclosures, and compliance with accounting policies, standards, and regulatory requirements.
- Compliance Verification:
- Verify compliance with statutory requirements, legal provisions, tax regulations, company law provisions, industry-specific regulations, and applicable standards governing financial reporting.
- Assess the adequacy of disclosures, footnotes, contingent liabilities, related party transactions, segment reporting, and other disclosures in the financial statements.
- Audit Reporting and Documentation:
- Document audit findings, procedures performed, audit evidence obtained, significant audit matters, and conclusions reached in compliance with auditing standards and regulatory requirements.
- Issue an independent auditor’s report containing audit opinions, audit scope, key audit findings, and any required disclosures or explanatory notes for stakeholders and regulatory authorities.
- Communication and Stakeholder Engagement:
- Communicate audit results, findings, and recommendations to management, audit committees, boards of directors, regulators, and other stakeholders transparently and effectively.
- Provide insights, analysis, and actionable recommendations for improving internal controls, financial reporting processes, governance practices, and compliance frameworks.
- Continuous Improvement and Compliance Monitoring:
- Collaborate with management to address audit recommendations, remediate control deficiencies, strengthen governance structures, and enhance financial reporting transparency and reliability.
- Monitor regulatory changes, accounting pronouncements, auditing standards updates, and industry best practices to ensure ongoing compliance and continuous improvement in audit processes and outcomes.
