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A statutory audit is a legally required review of a company's or government's financial statements and records, conducted by an external, independent auditor to determine whether an organization provides a fair and accurate representation of its financial position. This type of audit is mandated by law for certain types of companies, such as public limited companies, and aims to enhance governance, transparency, and trust in the reported financials.
The primary objectives of a statutory audit are threefold.
Following these steps can help ensure a smooth statutory audit process and contribute to maintaining transparency and trust in an organization's financial reporting.
Preparing for a statutory audit can be a daunting task, but following best practices can help ensure a smooth process. Start by maintaining accurate and up-to-date financial records throughout the year, as this will make it easier to provide the necessary documentation during the audit. Additionally, establish strong internal controls and risk management procedures to minimize the likelihood of errors or fraud.
When selecting an external auditor, choose a firm with relevant experience and a strong reputation for independence and quality. Communicate openly with the auditors throughout the process, providing them with access to all necessary information and addressing any concerns they may have. Finally, view the audit as an opportunity to improve your organization's financial management and implement any recommendations provided by the auditors.
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