Statutory Audit/ External Audit

Author: SRCO Business Insights | May 30, 2024

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

Let’s Talk

Explore how SRCO's expertise in audit, accounting, and advisory services can empower your business. Contact us today for tailored financial insights and strategic guidance.

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