Statutory Audit Services

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Escorting the Business by Statutory Audit Services

A statutory audit is an inspection of an organization's financial records by an external entity. The need for statutory audit services is felt at large because statutory auditors evaluate the accuracy of the financial records and the data of a government or company. The intention behind this is to determine whether the organization is delivering an accurate and honest representation of its financial position by evaluating information such as bank balances or accounting records. The Auditor should perform analytical procedures relating to revenue with the objective of identifying unusual or unexpected relationships involving revenue accounts that may indicate a material misstatement due to fraudulent financial activities. The statutory Auditor monitors the financial transactions and helps the people or investors to not get misled and determine a business's true and fair view of its financial performance, which is essential for shareholders or potential investors.

Why opt for a Statutory Auditor?

Quality Assurance

Enterslice assures you of the accuracy in representations of the financial position of the business because the statutory audit is performed to determine if a business delivers an honest and accurate representation of its financial position by evaluating information, such as bank balances, financial transactions, and accounting records to help to maintain the growth of the business in the market and shows the correct worth or value of the business.

Risk Assessment

Risk assessment is a key requirement of the planning phase of the audit, and we perform risk assessment procedures to obtain an understanding of the business and its environment, including the internal controls to identify and assess the risk of misstatement in accounting, whether due to error or fraud at the financial statement and relevant assertion levels which aids in designing further audit procedure. Our teams help in risk assessment because it is the identification and evaluation of several aspects of an entity whereby risks are identified and evaluated for use in guiding the audit procedures in further steps to keep actual business records.

Examination of Accounts

Our team of experienced statutory auditors provides a facility to help you better manage sustainability, brand reputation, and regulatory requirements, and the inspections will pinpoint the inconsistencies, weaknesses, and risks as well as identify the businesses' strengths and opportunities. Enterslice ensures that your assets meet all the safety, quality, and performance requirements, so the statutory Auditor inspects the books of accounts or financial institutions to represent the actual financial position of the company and the upcoming financial risks.

Why is Enterslice preferred most for Statutory Audit Services?

Cost-Effective and Efficient Service

We offer cost-effective and efficient statutory audit services to help you save time and money by providing you with experienced professionals with decades of cumulative experience and the use of digital technology to complete your audit in a limited time and the use of technology will help you to maintain reliability.

Comprehensive Service

We offer a comprehensive service that covers all aspects of the statutory audit process from planning to execution and giving a final report with solutions to overcome the discrepancies. The services we provide are tailored to the needs of the clients.

Statutory Audit Services to Private and Public Companies

Our statutory Auditor is appointed to determine if an organization delivers accurate data on their financial position by evaluating information, such as bank statements, financial transactions, and accounting records, to all the companies to mitigate the financial risks in the business, and accuracy is a key to sustain the growth.

Risk assessment

The team of statutory Auditors in Enterslice assesses the business risks and prepares the audit plan. It also includes the identification of the critical areas of the business and further evaluation of the likelihood of material misstatements.

Internal Control Testing

Enterslice provides the services to check and test the internal controls or procedures of your business. Usually, it is succeeded by reviewing the Documents, conducting the interviews of the employees, and observing the process.

Analyzing the Financial Institution

A statutory auditor from Enterslice is legally required to review the accuracy of the companies or government's financial statements and analyze them to identify potential errors or cases of fraud, and it also includes the review of the income statement and disclosures. The Auditor also checks whether the NBFC has suitable monitoring methods and whether the assets are properly insured.

Revenue Leakages

Our team helps you to identify the revenue leakage because it is an amount of money that your business has earned but hasn't collected because of a lack of awareness in the business, so the statutory Auditor prepares an audit report which includes the details of the financial transaction, expense, income or bills in a prescribed format. This report is then shared with the board of directors for further action after identifying the potential areas of leakages.

Balance Sheets Audit

Our team of auditors helps you with the balance sheet's accuracy as the Auditor executes this review based on supporting Documents. It involves several checks as per the Auditor's balance sheet. If there are any discrepancies in share capital, secured or unsecured loans, current liabilities, dues or returns, or invoices, then the balance sheet needs to be audited to maintain accurate financial data for the company.

Significance of Conducting Statutory Audits

According to a provision of the Companies Act of 2013, all private limited companies and public companies are required to conduct statutory audits of financial Documents. A statutory audit is intended to determine whether the organization is delivering an honest or accurate financial position or not by evaluating or examining the bank balances, financial transactions and accounting records. In the scenarios of LLPs or Limited Liability Partnerships, it is important for the specified companies which are mentioned below to conduct the statutory audits

  • If the turnover of the company crosses rupees 40 lacs
  • If the capital contribution is more than rupees 25 lacs

Validation of the Finances

The Auditor validates the accounting records that are prepared by the company, and the statutory Auditor needs to verify whether the financial records provided by the company are accurate with no misstatements. The statutory Auditor provides an independent opinion on the true and fair view of the financial position and profitability of the company.

Earn Credibility

Credibility plays an important role in the growth of a company because when the company is credible, it will attract more investors. The accurate financial report prepared by the statutory Auditor wins the trust of the government authorities to know the reliability of the company in the market.

Rectifying the Error

The Auditor conducts a statutory audit to go through all the books of accounts and detect errors or omissions that are required to be rectified so that there are no discrepancies in the financial records.

Reduce Fraud

When a company doesn't conduct auditing, then the chance of financial fraud will increase, and scams by the employees may remain undiscovered, causing loss of money and reputation, but the timely statutory audit of the books of account will help to minimize the fraud in the company.

Natures of Statutory Audits

There are various types of audits under the Companies Act 2013 are

Cost Audits

It is a method to verify the cost records of products or services that contain their manufacturing cost, labour cost, overheads, etc., and it is a review of the accounting. Section 148(3) of the Companies Act 2013 states that only a practising cost accountant or a firm can do the work of cost auditing of the company and, the cost auditor will be appointed by the cost auditors and, the fees of cost auditors are decided by the shareholders.

Secretarial Audits

According to the provisions of the Companies Act 2013, a secretarial audit is a process to check compliance with the provisions of various laws and regulations, maintenance of books of accounts, records, etc. As per the act, this audit is mandatory for the following companies such as every listed company, a public company with paid-up capital greater than fifty crores or turnover of two-hundred and fifty crores or more or any private company serving as a subsidiary of a public company conduct a secretarial audits.

Internal Audits

An internal audit is an independent service to examine a company's internal controls, business practices, processes, and methods and to ensure compliance with the laws applicable to the company. This type of audit ensures compliance with laws and regulations and helps to maintain accurate and timely financial reporting and data collection. This audit also provides tools to evaluate internal controls, management, corporate governance, etc.

Financial Audit

A financial auditor has the right to access all of the company's financial books, records and information. The financial Auditor has to check whether the financial statement is true or not and help the company represent its financial statement. The financial audit is done to ensure that the financial records provided are accurate representations of the transactions they claim to represent.

Role of the Statutory Audit

With the word 'statutory', it is clear that this type of auditing is necessary. Statute refers to the laws and regulations that are enacted by the governing body of the legislative branch of the organization. The regulations that are set by the management team or the board of directors also apply to the company.


Audit is the examination of those records which are held by the company, government department, individual or agency. It also involves the analysis of various financial records or other areas. In the audit process, the things that can be included are the returns on investment, expenditures, reports of the company, revenue or benefits, etc. These elements are also used for determining the cumulative ratio.


The main aim of the financial audit is the assessment of whether the funds are being handled properly and whether the filings and records are accurate or not. The conduct of the statutory audit is not necessarily an indication of misconduct. It is sort of a formality that is used to discourage crimes like misappropriating funds by scrutinizing various Documents on a routine basis.

Penalty for non-compliance with Statutory Audit

If there is non-compliance with the statutory audits, then the government can impose a fine starting from rupees 25,000 to rupees 5 lacs. The officer who was involved in such default can also be imprisoned for a period of one year, and a penalty can also be imposed upon such officer starting from rupees 10,000 to rupees 1 lacs or both.

Appointment of Statutory Auditor

Every private limited company must appoint its first Auditor to conduct the statutory audit of the company within 30 days from its registration date. At the time of the first Annual general meeting, the shareholders will confirm the appointment of the Auditor and who holds the office of Auditor for a term of five years. For the statutory Auditor, the company can appoint only an independent Chartered Accountant, CA Firm or LLP.

Advantages of a Statutory Audit

The advantages of the statutory audit are

  • It increases the authenticity of the financial reports as the Auditor properly verifies the statement,
  • It helps to improve the management to perform their job efficiently,
  • It prevents the company from any financial error or fraudulent activities,
  • It helps to gain the trust of shareholders, banks, and the government.

Challenges in Statutory Audit

Incomplete Documentation

Statutory Auditor rely on sufficient and relevant Documents to support their findings and conclusions because if the company being audited lacks proper books of accounts, bills or other required Paper works or fails to provide complete records, then it can impede the audit process and make it difficult for the Auditor to provide a relevant decision or opinion

Time Constraints

Statutory auditors often work within strict deadlines, especially when financial statements need to be issued, or regulatory requirements must be met because limited time can hinder the process of examination of the audit, forcing the Auditor to work within a limited time.

Complex or Emerging Accounting Standards

Changing accounting standards and regulations pose challenges for auditors, especially when new or complex accounting guidelines are introduced. The Auditor needs to be up to date with evolving standards and ensure compliance, which can require additional research, training, and expertise.

Limited Access to Information

Statutory Auditors rely on the cooperation or financial transaction of the company that is being audited to access relevant information and data. In some cases, companies restrict access and delay providing the requested information. This can impede the audit process and require auditors to seek alternative sources or methods to obtain necessary evidence.

Technological Challenges

As businesses adopt complex systems and digital processes, Auditors must adapt and utilize technology effectively. However, challenges related to data security, system complexity, or limited technical expertise can hinder the Auditor's ability to understand and test automated controls or rely on electronic evidence.

Applicability of Statutory Audit

Every company has to do an audit of their books, and it falls under the applicability of Statutory Audit by appointing a statutory auditor. There are some important criteria to be followed

Limited Liability Partnership

A statutory audit is considered for an LLP when the annual turnover exceeds Forty Lac rupees, and it is also needed if the contribution to the LLP exceeds a paid-up capital of Twenty-five Lac Rupees.


A proprietor must have a statutory audit completed by an accountant if the annual turnover exceeds One crore rupees for a business or annual gross receipts exceed Twenty-Five Lac for professional services.

Private Companies or Public Company

The statutory audit is compulsory regardless of profits, losses or turnovers.

Individual, HUF or Partnership Firm

There is zero statutory audit applicability for these kinds of firms.

Legal provisions regulating Statutory Audits

In the Companies Act of 2013, the provisions regarding Statutory Audits are mentioned in Sections 139 to 147. The Auditor can have access to all the company's financial records, like financial books, etc. If they seek any other information for properly assessing the financials of the company, they can update the concerned authorities to provide the same. The Auditor must prepare the audit report. Now, under these provisions, if the Auditor detects any type of fraud, then they must report the same to the authorities of the Central Government.

Procedure for Statutory Audit

The statutory audit procedure starts with an examination or investigation of the internal audit report to get an idea of the company's current financial procedure. The decision to adopt the statutory audit procedure for recording information about the company’s transactions is determined after comparing the internal audit report with the statutory audit report from the previous year because the statutory audit is done annually to form an opinion on the financial statement of the company whereas the internal audit is done basically to prevent and detect errors and frauds to clarify the business’s accounting department tracks the financial transaction related to sales and purchase so the following steps are

  • The Statutory Auditor evaluates the internal audit report for the assessment year to gain knowledge of the company and its operating environment,
  • The Statutory Auditor reviews the statutory audit report from the prior fiscal year to evaluate its summary and findings and gain knowledge about the internal control system,
  • The Statutory Auditor records the information on sales and purchase transactions and examines the account balances,
  • Controls operational effectiveness testing and account information testing.

Benefits of Statutory Auditing

  • It provides accurate and up-to-date data on the financial position of the company,
  • A clear record of the company's compliance with statutory requirements,
  • A fair communication between you and the authorities responsible for regulating the business,
  • Increase the transparency in the company,
  • Increase the confidence of potential investors by presenting them with the company's accurate financial report.

Checklist of Statutory Audit

Internal Control Verification

As an Auditor, there is an internal controller to check the financial positions where it is necessary to check the processing of the pattern of the company, keep track of accounting entries, control cash flow, etc.

Statutory Compliance

The statutory compliances are the GST, Input Tax Credit, Output tax liability, general verification, tax deducted at source, tax payable, tax receivable, etc.

Balance Sheets

The audit of the balance sheet refers to checking the accuracy of the information that is found in the company's balance sheet. The auditors conduct such evaluations based on Documents like the latest bank statements, reconciliation statements of the bank, sanctioned letters that confirm the interest rate, etc. Copies of the invoices go on to show the addition to the assets, as well as the list of the assets that are not accounted for in the books.

Internal Controls Testing

The testing of the internal controls helps to identify if there are any frauds or errors which are used by the client entity. The auditors can very well choose to rely on the internal controls of the client's system as part of their auditing activities. So, if there is a revelation to the effect that the controls are weak, the auditors will upgrade the use of substantive testing.

Compliance related to TDS testing

During the inspection of the TDS compliances, it is crucial to keep a check on the voucher entries of the transactions related to TDS. Verification is also done on the source Documents that are related to TDS.

Verification of the profit and loss Account items

The essential elements include the following

  • To check the sales and purchases.
  • In order to check whether the metrics are improving or not, it is crucial to conduct an analysis of trends.
  • The benchmarking of the company should be compared. 
  • The preliminary expenses should be checked to see if they are capitalized in the span of five years.
  • The valuation of the closing stock needs to be done as per AS-2. 
  • The dividend which is paid by the company should be within the specified limits.
  • The loans or advances of the company must be permitted by the Income Tax Act or the Companies Act of 2013

Digital Transformation Advisory

A statutory auditor offers the service of preparing and inspecting the organization's financial records to determine whether the financial statement or records are accurate or not, and if it's not accurate, then provide a report to the shareholder or board of directors to maintain transparency and look after the fraudulent activity. A statutory audit is required to be maintained on a company's financial statements to help the company provide a fair and accurate representation of itself by examining or investing the books of accounts, bank balances, and financial transactions. We leverage technology to bring efficiency and effectiveness in our auditing, and our statutory Auditor has knowledge of various businesses, is a person with complete auditing services, and keeps the company updated on its financial health.

Frequently Asked Questions

The services provided by the auditors are auditing, inspection of the company's financial books, certification of accounting statements, etc.

The objective of this type of audit is to check if the organization is providing an accurate representation of the financial positions or not.

An auditor has all the powers and rights to inspect the Documents, conduct interviews with the staff members of the company or industry, further evaluate the financial position of the company, etc.

In addition to the services that can be provided by an auditor, certain services cannot be provided by the Auditor, such as

  • The indirect financial interest in the client
  • Loan or guarantee to the client
  • Client’s fees- Undue dependence

The major role of the Auditor is to report to the shareholders about the financial statements that are presented to him by the company.

The main purpose of these types of auditors and audits is to check if the company is following the financial rules and regulations of the country or not.

The statutory audit is conducted to know the real financial position of the company or industry, whereas the internal audit is conducted to check if any fraud or misrepresentation is happening inside the company and to prevent the same.

The appointment of the statutory Auditor is done by the shareholders of the company.

The scope of the work of the statutory audits is defined by the laws to assess whether the financial condition of the company represents a true and fair view.

The internal control processes should be checked. The adherence of the company to the finance or banking laws is to be evaluated.

As per the law, the company's board of directors must name an auditor within one month of incorporation, and then that Auditor will audit the company's financial statement every fiscal year.

A company's statutory Auditor is a person who verifies the accuracy of the company's accounting records, and for that, only a chartered accountant or CMA is eligible for statutory audit.

Yes, because instead of earning or turnover, every private limited company is required to do the statutory audit.

Yes. An OPC is required to undertake a statutory audit within 15 days of the first AGM, and the OPC must appoint a statutory auditor for five years using the ADT-1 Form.

The auditors should ensure that the organization pays its statutory dues to the government on time, such as GST, income tax, customs duty, wealth tax, etc.

It is an external audit performed by an accountant appointed by the company and is an independent individual.

All the companies, such as Private Limited Companies, One-Person Companies, and Limited Liability Companies, irrespective of the nature of business and sales turnovers.

All audits, whether statutory or voluntary, are conducted by the CA and a larger number of statutory audits are done by the cost accountants.

The mandatory submission of financial and non-financial information to a government.

The role of the statutory Auditor is to report to the shareholders on the financial statement presented to him by the director, and he has the right to access all of the company's financial books, records, and information.

The statutory audit is also known as a financial audit.

The person must be a CA or form where the majority of members are CA.

Any service provided to the management of a company is treated as management services and simultaneously a prohibited non-audit service.

Section 139 of the Companies Act 2013 states about the appointment of the auditors.

Section 140 (1) of the Companies Act 2013 states that the Auditor can get removed by passing a special majority.

Statutory Auditors inspect Documents, inquire people, observe the way of working of employees, obtain third party confirmation, test transactions, and apply other procedures they deem fit to verify the accuracy of financial information.

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