Difference between statutory audit and internal audit
Difference between statutory Audit and Internal audit
Statutory Audit:
Internal Audit
Basis | Internal Audit | Statutory Audit |
Objective and Scope | The scope of internal auditors is beyond the accounting and financial records to obtain the full understanding of the operations of the organization. The objectives and scope of the internal audit are determined by management. | The external auditor, on the other hand has a statutory responsibility to report on the true and fair view of the accounts of the company and whether proper books of accounts and other accounting record have been kept. |
Appointment | The internal auditor is appointed by the management | The external auditor is appointed by the shareholders of the company in the annual general meeting in accordance with the provisions of the relevant Companies Act |
Accountability | Internal auditors are accountable to the management | A statutory auditor is accountable to the shareholders of the company |
Qualification | There are no minimum qualifications prescribed under the Companies act for the persons appointed to act as internal auditors. | The qualifications of the statutory auditors are prescribed under the provisions of the Companies Act. |
Right to access books and other information | There are no such rights available to the internal auditor. | The Companies Act allows the statutory auditor, the right of access at all times the books and accounts and vouchers of the company, whether kept at the head office of the company or elsewhere. |
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