A statutory audit is a mandatory audit of a company’s financial records carried out by an independent auditor to ensure that the financial statements present a true and fair view of the company’s affairs. Under the Companies Act, 2013, every public and private limited company, regardless of turnover or capital, must undergo a statutory audit annually.

The statutory auditor examines the company’s books of accounts, vouchers, receipts, and supporting documents to verify accuracy, compliance with accounting standards, and adherence to legal provisions. After the audit, the auditor issues an Audit Report highlighting the company’s financial health, any discrepancies, and recommendations for corrective action.

To comply, companies must maintain proper books of accounts, appoint an auditor within the prescribed timelines, and ensure filing of statutory returns with the Registrar of Companies (ROC). Non-compliance with statutory audit requirements can lead to penalties on the company and disqualification of directors.

Regular statutory audits not only fulfill legal obligations but also enhance credibility, build investor confidence, and strengthen governance practices.