General Difference is Statutory Audit is mandatory for every company registered under the Companies Act, 1956, where as Special Audit is not required for every company.
Genrally special audit is conducted on the direction of CG, where as Statutory Audit is not directed by CG.
The Central Government has been vested with power under section 233A to direct by order, that a special audit of the company's accounts for such period or periods as may be specified shall be conducted.
The Central Government may, by the same or different order, appoint either a Chartered Accountant as defined under section 2(1)(b) of the Chartered Accountants Act, 1949 or the company's auditor himself to conduct such special audit.
The Central Government may order for a special audit, if it is of the opinion:— (a) that the affairs of any company are not being managed in accordance with sound business principles or prudent commercial practices; or (b) that any company is being managed in a manner likely to cause serious injury or damage to the interests of the trade or business to which it pertains; (c) that the financial position of any company is such as to endanger its solvency;
Audit of accounts is compulsory for all types of companies:
All the companies registered under the Companies Act, 1956, whether public or private and whether having a share capital or not, are required to maintain proper books of accounts under the provisions of section 209 of the Companies Act, 1956. Companies have also to get their Books of accounts audited as required under section 224 of the Act.
Section 224 governs the aspects of appointment of auditors. The auditors are to be appointed normally by the company in an annual general meeting by passing an ordinary resolution. However, special resolution is required to be passed when section 224A comes into play. First auditors are to be appointed by the Board of directors within one month of the date of registration of the company.
A casual vacancy in the office of auditor can be filled up by the Board of directors but where the casual vacancy is caused by the resignation of auditor; such vacancy is to be filled up by the company in general meeting.
13 August 2013
Please find below point of distinction:
1. Statutory audit is covered under section 224 whereas special audit is covered under section 233A of companies act, 1956. 2. Statutory auditor is appointed by shareholders whereas special auditor is appointed by Central government under section 233A of companies act, 1956. 3. Statutory audit is compulsory for every company under section 224 whereas special audit is ordered only when affairs of any company are not being managed in accordance with sound business principles or prudent commercial practices. 4. Statutory auditor submit his report to the shareholders whereas special auditor submit his report to the Central government under section 233A of companies act, 1956.
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