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Difference

Mohit Gupta (article) (164 Points)

11 March 2019

Difference between Tax audit, statutory audit & Internal audit?

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Tax audit refers to the audit of books of accounts u/s 44AB of Income Tax Act 1961.
Statutory Audit refers to the audit of Companies as per Companies Act 2013 done by CA.
Internal Audit refers to the overall audit of books of accounts done by Commerce related person.

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Mohit Gupta (article) (164 Points)
Replied 11 March 2019

Thanku sir

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 March 2019

tax audit refers to audit under the Income Tax Act 1961 if the turnover of the organization crosses the specified threshold during the previous year. it will be applicable to all types of entity I.e. firm company trust or proprietary concern.

statutory Audit refers to the audit which us prescribed to be mandatory under a statue. say for company under Cos Act, cooperative society under the cooperative society act or Trust under the respective trust act. Statutory Audior us appointed by the members of the organization.

Internal audit refers to audit conducted on behalf of management to know the true financial position for making strategic decisions. internal auditor is appointed by the management if the company.

Tax auditor and statutory auditor can be done by the same auditor.however internal auditor cannot perform tax audit and stat audit of the same organization.

Mohit Gupta (article) (164 Points)
Replied 11 March 2019

Thanku sir for more clarification

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kajol (Executive) (201 Points)
Replied 11 March 2019

A statutory audit is an audit, which is made mandatory under The Companies Act 2013. The purpose is to check the truthfulness and fairness of accounting records.

On the Contrary, Tax Audit is defined as an audit of the accounts of the taxpayer for the requirement of Section 44AB of The Income Tax Act, 1961 for assessing the correct income of the Assesee.

While internal auditors are appointed by the management of the company, statutory auditors are appointed by the shareholders of the company. Internal audit also tries to detect any anomalies and errors that may have crept in the financial statements.