A statutory audit is an independent examination of an organisation's financial statements and other financial information, which is conducted in accordance with legislation. The purpose of a statutory audit is to provide assurance that an organisation's financial statements and other financial information are free from material error and fraud.
Statutory audits are conducted by certified public accountants (CPAs) who are independent of the organisation being audited. In most jurisdictions, statutory audits are required by law for certain types of organisations, such as public companies and charities.
The term "statutory audit" is used in the United States, United Kingdom, Ireland, Australia, and New Zealand. In other jurisdictions, similar audits may be referred to as "financial statement audits", "external audits", or "independent audits".
What does a technical auditor do?
A technical auditor is an accountant who audits the financial statements of a company to ensure that they are accurate and comply with Generally Accepted Accounting Principles (GAAP). Technical auditors also review the company's internal controls to ensure that they are adequate and effective.
What are the 4 types of audit opinion? There are four types of audit opinions: unqualified, qualified, adverse, and disclaimer.
Unqualified: Also called a "clean opinion," this is the auditor's best possible opinion and means that the financial statements are free of material misstatement and the auditor has found nothing that would lead them to believe the statements are misleading.
Qualified: A qualified opinion means that the financial statements are free of material misstatement, but that the auditor has found something that could potentially lead to a material misstatement. For example, the auditor may have found that the company does not have adequate internal controls in place.
Adverse: An adverse opinion is the auditor's worst possible opinion and means that the financial statements are materially misstated and the auditor has found significant evidence that the statements are misleading.
Disclaimer: A disclaimer of opinion means that the auditor was unable to form an opinion on the financial statements due to a lack of information or because the financial statements were not prepared in accordance with generally accepted accounting principles. What is included in statutory accounts? Statutory accounts are a company's annual financial statements that are filed with the Registrar of Companies. They are prepared in accordance with the Companies Act and give a true and fair view of the company's financial position. The accounts must be signed by the directors and auditors, and filed at Companies House within nine months of the end of the financial year.
The accounts must include:
- a balance sheet
- a profit and loss account
- a directors' report
- an auditor's report
The balance sheet shows the company's assets and liabilities at the end of the financial year. The profit and loss account shows the company's income and expenditure for the year. The directors' report contains information on the company's business activities and performance during the year. The auditor's report contains the auditor's opinion on the financial statements. What are the 4 types of audit reports? The four types of audit reports are unqualified, qualified, adverse, and disclaimer. An unqualified audit report is the most positive and indicates that the financial statements are free of material misstatement. A qualified audit report is less positive and indicates that there are some limitations on the scope of the audit or that the financial statements are not free of material misstatement. An adverse audit report is negative and indicates that the financial statements are materially misstated. A disclaimer audit report is the most negative and indicates that the auditor was unable to express an opinion on the financial statements. What is the most common type of audit? The most common type of audit is the financial statement audit. This is where an auditor looks at a company's financial statements and assesses whether they are accurate and in line with generally accepted accounting principles (GAAP).