Introduction A statutory audit is a legally mandated review of a company’s financial statements to ensure accuracy and compliance with regulations. In India, statutory audits are governed by the Companies Act, 2013, and are essential for maintaining transparency and financial integrity. Who Needs a Statutory Audit? Companies registered under the Companies Act, 2013 Businesses exceeding turnover limits as prescribed under tax laws Entities receiving foreign investments Certain public sector and government entities Key Objectives of Statutory Audits Ensure financial accuracy and reliability Identify and prevent fraud Ensure compliance with legal and regulatory requirements Improve investor confidence Process of a Statutory Audit Planning the Audit – Understanding the company’s financial structure and regulatory requirements. Reviewing Financial Statements – Examining balance sheets, profit & loss statements, and cash flow reports. Testing Internal Controls – Ensuring that financial systems are secure and efficient. Verifying Compliance – Checking adherence to tax laws, corporate laws, and accounting standards. Reporting the Findings – Preparing and submitting an audit report to regulatory authorities. Consequences of Non-Compliance Failure to conduct a statutory audit can result in penalties, fines, and even legal action against company directors. Hence, businesses must engage professional auditors to ensure compliance.

Introduction With the introduction of Goods and Services Tax (GST) in India, businesses are required to maintain transparency in their tax filings. A GST audit ensures that companies comply with GST laws and pay the correct tax amount to the government. Who Requires a GST Audit? Businesses with an annual turnover exceeding ₹5 crore (as per GST law) Entities identified by GST authorities for scrutiny Companies seeking voluntary compliance verification Objectives of a GST Audit Verify the correctness of GST returns filed Ensure accurate Input Tax Credit (ITC) claims Identify tax evasion or misreporting Ensure proper documentation of invoices and transactions Process of a GST Audit Understanding Business Transactions – Reviewing purchase and sales records. Comparing Returns with Financials – Ensuring GST returns match books of accounts. Checking ITC Claims – Verifying input tax credit eligibility and its accurate reporting. Examining Tax Payments – Ensuring timely and correct GST payments. Audit Report Filing – Submitting findings to GST authorities. Common Errors in GST Compliance Incorrect GST classification of goods/services Mismatch in GST returns and financial books Delayed or missing tax payments Wrong Input Tax Credit claims Conclusion A GST audit not only ensures compliance but also helps businesses avoid unnecessary penalties. Partnering with an experienced audit firm can help in smooth tax management and regulatory adherence.