8 Essential Requirements For The Statutory Audit Of A Business

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Statutory Audit Of A Business

Companies are required by law to get statutory audit conducted in India by independent and qualified professionals. The practice helps in establishing the fairness and accuracy of the financial records of a business to regulatory authorities as well as shareholders and other investors. Enterprises hire the top audit companies in India to get their books scrutinized every year and ensure compliance with the regulation. Business owners usually engage accounting services in India to get assistance on maintaining their financial records so that the statutory audit is conducted smoothly. Let’s take a look at the essential things which a company must provide to auditors for successfully completing the process.

9. 1. General Ledger Of The Company

The general ledge of a company is an important accounting record containing details of assets, liabilities, revenue, owner’s equity and expenses. The ledger possesses records of each and every transaction that has taken place since the company’s inception. Professionals refer to this record for preparing statements or reports and organizations must make all efforts to maintain the ledger diligently.

8. 2. List Of All Bank Accounts

Experts working with the best audit firms in India say that professionals need to verify an enterprise’s bank balance as mentioned in the balance sheet. They will require complete details of all the bank accounts the company holds for the purpose. Business owners must, therefore, prepare a list of all the accounts along with the bank name, account numbers and the authorized signers.

7. 3. Information About Loans

Businesses take loans from banks or other financial institutions for meeting various requirements. They may have needed the money to expand their operations or for purchasing raw material. A vital part of the statutory audit in India is to confirm the debt of the company with the creditor. A current loan statement with updated information will be helpful in making the verification easier and quicker.

6. 4. Trial Balance Record

The trial balance is a bookkeeping record containing the details of the closing balance of all the accounts in the general ledger. It provides the foundation for the preparation of financial statements. Experts running the top accounting firms in India say that the document helps assess the accuracy of the financial records of a company.

5. 5. Leases And Material Contracts

Enterprises have to provide information about all types of leases and material contracts that they are party to. An auditor needs access to the data in order to evaluate the expenses that the organization will incur because of the contracts.

4. 6. Complete Details About Employees

A business must provide details of all the full-time staff members on its payroll apart from other workers hired on a temporary basis. The professionals working at top accounting companies in India say that it helps in calculating the cost involved in paying compensation to the employees as well as assessing the tax liabilities of the organization.

3. 7. Information Of Fixed Asset Purchases

Any fixed asset purchased by the corporation during the period for which audit is being conducted has to be examined by the independent auditors. They must be provided the details of the purchases along with invoices to help them make a fair assessment.

2. 8. List Of Statutory Payments

There are various tax requirements that a business has to meet in order to continue its operations. Companies may be required to pay tax deducted at source, excise, employee taxes, sales tax, service tax besides other levies depending on the nature of business they are involved in. An auditor needs access to the documents related to statutory payments to calculate the costs as well as ensuring compliance with legal regulations.

1. Conclusion

Statutory audit in India is a compulsory activity that most companies must get conducted every year. Preparing in advance by collecting all the important information will help them get the process completed easily and speedily.

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