How to practices statutory audit

Planning Phase:

The first phase of a statutory audit is planning, which involves understanding the company's business, assessing the risks, and designing an audit approach. The auditor will typically hold an opening meeting with the company's management to discuss the scope of the audit, timelines, and expectations. The auditor will also obtain an understanding of the company's internal controls and risk management processes. Based on this information, the auditor will develop an audit plan that outlines the procedures to be performed and the resources required.

Audit Testing Steps:

The second stage of the regulatory audit is the testing stage, where the auditor performs the task of obtaining audit evidence. The accounting policy will vary depending on the nature and complexity of the company’s business and the risk of a material misstatement. The auditor may develop specific techniques, including analyzing account balances and transactions, or trial controls, which assess the effectiveness of the company’s internal processes The auditor may also use data analysis techniques to identify unusual practices or patterns.

Report Section:

The third stage of the statutory audit is the reporting stage, in which the auditor examines the audit evidence obtained and forms an opinion on the financial statements The auditor will prepare an audit report giving an opinion as to whether the financial statements are presented for good in all material respects or in accordance with applicable accounting standard rules. The auditor’s report should also include a description of the scope of the audit, the auditor’s responsibilities, and any significant weaknesses or significant findings of the audit

Communication with senior management:

Throughout the audit process, the auditor will liaise with management and provide feedback on key findings. The auditors can also make recommendations on how to improve the company’s internal management and auditing procedures. The auditor will discuss any significant weaknesses or significant findings with management and obtain their views. The auditor shall record all communications with the contractor in the audit work papers.

Accounting Manual:

The auditor will review detailed audit documentation, including audit charts, working papers and audit reports. The audit documentation should provide sufficient evidence to support the auditor’s opinion and should be explained in detail so that the new auditor can understand the work done. Auditing documents must comply with applicable auditing standards and procedures.

conclusion:

In conclusion, statutory auditing is an important process that assures stakeholders that the company’s financial reporting is accurate and reliable. The auditor performs the task of obtaining audit evidence, analyzes the evidence obtained, and forms an opinion on the financial statements. Throughout the audit process, the auditor interacts with management and maintains a detailed audit file. The audit report gives an opinion as to whether the financial statements are fairly presented in all material respects in accordance with the applicable accounting standards rules.

{Wasiur}
Digital Marketing Executive