Quick Answer: What Is Statutory Audit In Banks?

What is the difference between concurrent audit and statutory audit?

A statutory audit is one required by a country’s laws, sometimes called an external audit, since it is carried out by independent external auditors.

The concurrent audit serves the purpose of effective control as it is normally conducted by external agencies..

What is meant by statutory audit?

A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records. … Firms that are subject to audits include public companies, banks, brokerage and investment firms, and insurance companies.

What is a bank audit?

A bank audit is a routine procedure designed to review the services of financial institutions to ensure they are in compliance with laws and industry standards. … Tests are carried out on the systems, findings are generated, and auditors recommend corrective actions the bank needs to take.

What is the purpose of statutory audit?

The purpose of the statutory audit is to provide an independent opinion to the shareholders on the truth and fairness of the financial statements, whether they have been properly prepared in accordance with the Companies Act and to report by exception to the shareholders on the other requirements of company law such as …

What are 3 types of audits?

What Is an Audit?There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits.External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.More items…•

What are the qualities of an auditor?

The 5 Characteristics of an AuditorHave the Required Experience. Certifications are key academic qualifications for an auditor. … Ability to Make Independent Decisions. An auditor’s decision should not be wavered or influenced by anyone. … Auditors Have the Ability to Understand Different Business Needs. … Dependable. … Effective Communication Skills.

Why is Bank audit important?

A periodic Internal audit is required to monitor the bank’s system of internal control and procedures. Good internal audit process helps the management in the effective discharge of its responsibilities. It gives them the assurance of the risk and operational performance of the bank.

What are the features of statutory audit?

Salient Features of Statutory AuditStatutory audit has been made compulsory bylaw.Its scope is also determined by the law. … The Companies Act, 1956 has prescribed qualifications for a statutory auditor. … Similarly the law has also laid down the rights, duties and liabilities of the statutory auditor.More items…

How do I get a bank statutory audit?

The following procedure will be followed for appointment of Statutory Branch Auditors (SBAs) in Public Sector Banks (PSBs): The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.

What are the types of bank audit?

Bank Audit can be classified into 3 broad categories :-Concurrent Audit.Internal Audit/ Information Systems Audit.Statutory Audit.

What is the limit for statutory audit?

The Act states that if the turnover of any enterprise is more than 1 crore, and in case of professionals if the value of services is more than Rs. 50 lacs then they have to get their books of accounts audited by a Chartered Accountant.

Is statutory audit and external audit same?

Answer: Statutory audit is an external audit that is conducted by an audit firm or individual external to the organisation. Internal audit is conducted by employees from within the organisation.