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Statutory Audit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Statutory Audit

  • This topic has 2 replies, 2 voices, and was last updated 4 years ago by Kim Smith.
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  • December 8, 2018 at 7:29 am #488400
    alikhakar
    Member
    • Topics: 186
    • Replies: 79
    • ☆☆☆

    Hello sir I’m new to the subject as i have just started studying.
    Statutory audit is mandated by legislation is some countries therefore companies are compelled to perform it. However even if not mandatory in some countries by law, management may conduct an external audit for its benefits.
    My ques is ..if a company has already performed statutory audit, would it perform external audit also ? or in this case statutory and external audits both will be same ? What are differences b/w them (if any) apart from legal requirement.
    Thanks

    December 10, 2018 at 8:18 am #488667
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6786
    • ☆☆☆☆☆

    There are two types of audit – internal (within the entity) and external (independent). Generally an entity will only go to the expense of an external audit of financial statements where there is a legal (statutory) requirement for one. So a statutory audit (e.g. of a company) is performed by an external auditor who is approved (i.e. qualified and registered) to carry out such a statutory audit (a “statutory auditor”).
    In ACCA AA, you would assume all references to audit/auditor to mean external/statutory (internal audit/auditor/function will always have the word internal).

    December 10, 2018 at 8:18 am #488668
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6786
    • ☆☆☆☆☆

    There are two types of audit – internal (within the entity) and external (independent). Generally an entity will only go to the expense of an external audit of financial statements where there is a legal (statutory) requirement for one. So a statutory audit (e.g. of a company) is performed by an external auditor who is approved (i.e. qualified and registered) to carry out such a statutory audit (a “statutory auditor”).
    In ACCA AA, you would assume all references to audit/auditor to mean external/statutory (internal audit/auditor/function will always have the word internal).

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