Pls explain the meaning of and the difference between the following:
1. Stat Audit
2. Concurrent Audit
3. Tax Audit
4. Internal Audit
5. Any other major kind of Audit
I have some idea about tax audit only.
5 Replies
ok
(CA Job)
(39 Points)
Replied 26 January 2013
1. Statutory Audit is required by the statue governing the entity. eg. as per companies act all companies are required to gets their accounts audited.
2 Concurent audit is technique of audit where auditing is done simultaneously when the transactions occured. In other words concurent audit is a routine function.
3 Audit mendated by the revenue authorities is tax audit. e.g. Audit requirement under income tax act and VAT Audit
4 Internal Audit is the system of audit setup by the management itself for the audit of internal control system. Area of audit is defined by management itself
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 26 January 2013
| Originally posted by : ok | ||
 |
1. Statutory Audit is required by the statue governing the entity. eg. as per companies act all companies are required to gets their accounts audited. 2 Concurent audit is technique of audit where auditing is done simultaneously when the transactions occured. In other words concurent audit is a routine function. 3 Audit mendated by the revenue authorities is tax audit. e.g. Audit requirement under income tax act and VAT Audit 4 Internal Audit is the system of audit setup by the management itself for the audit of internal control system. Area of audit is defined by management itself |
 |
Other Kind of audit includes Management and operational audit,IT Audit , Forensic Audit are some of them.
CA Surbhi Singhal
(CA CS NCFM Dip-IFR B.Com)
(983 Points)
Replied 01 February 2013
What is the difference between internal audit and concurrent audit?? And what is management and operational audit??
Pawan Verma
(Assistant manager finance)
(186 Points)
Replied 12 February 2013
Internal audit is a broader term used which covers Management and Operational audit.
Internal audit is basically conducting a check on the company's "Internal Controls" in all the processes. (Eg: Sales, Purchases etc).
Whether you call it an Operational audit/Management audit depends on the scope of audit you are performing.
If in an internal audit you cover operational aspects (Including Financial aspects) like Production, Logistics etc, one could term it as an operational audit.
In Management audit, your scope of work is defined by the management. And you are supposed to report directly to them. (Say some special assignments like fraud investifation etc)
Sathish M
(Management Accountant)
(40581 Points)
Replied 12 February 2013
The principal objectives of the Statutory Audit is to ensure that the financial statements i.e. the Balance Sheet, Profit & Loss Account and Cash Flow Statement give a true & fair view and are free from any material misstatements.
DIFFERENCE BETWEEN INTERNAL AUDIT AND STATUTORY AUDIT
Following are the main points of difference between internal audit and statutory audit:
1. Appointment - The management of the organization makes the appointment of an internal auditor. The statutory auditor appointed by different authorities. First statutory auditors appointed by the shareholders in the annual general meeting.
2. Qualification - Qualifications of the statutory auditor prescribed in the companies act, 1956. Essentially a person should be a practicing chartered accountant for appointment as a statutory auditor. There is no fixed qualification for the position of an internal auditor.
3. Objects - The main object of the statutory audit is to form an opinion on the financial statement of the organization and the auditor has to state whether the financial statements are showing the true and fair view of the affairs of the organization or not. The main object of the internal audit is to detect and prevent the errors and frauds.
4. Scope - The Companies Act, 1956, fixes the statutory auditor’s scope and cannot be changed by mutual consent between the auditor and the management of the audited business unit. The internal auditor’s scope is fixed by the mutual consent of the auditor and the management of the unit under audit.
5. Remuneration - Remuneration of the statutory auditor is fixed by the appointing authority, I e in case of first auditors, the auditors the directors fix the Remuneration and in case of the subsequent auditors the company in its general meeting fixes the remuneration. In case of internal auditor, the management who appoints him fixes his Remuneration.
6. Report - The statutory auditor submits his report to the shareholder of the company in its general meeting. The internal auditor submits his report to the management of the company who is also his appointing authority.
7. Removal - The procedure of removal of the statutory auditor is very complex. Only the company in the general meeting can remove the auditor. It also has to take the permission of the central government. The management of the entity can remove internal auditor.
Tax audit is the process of computation of taxable income according to the provisions of u/s. 44AB of the Income- tax Act, 1961. It is a pre-requisite for maintaining transparency in the financial statements filed by the assessee’s with the Income-tax department.
The other major types of audits are Cost Audit, Secretarial Audit etc.
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