The term statutory audit refers to the review or the record of the company of the government organization which is required by the law or the municipal authority of any particular region. This is done to monitor the performance of the firm or the government organization. The company here the auditors who provide the auditing report and submit those reports annually or semiannually to the law or the concerned municipal law authority. This statutory auditing finally does the cross checking of the financial reports which are provided by the companies. They do cross checking by gathering the transaction information from the company’s bank and also from other various sources.
This statutory auditing is done for the government own companies. The law firm responsible for making this statutory auditing requires all the municipalities which are performed by that government organization. The authority examines all the financial transactions and account balances which contributes in making the final report by the statutory auditing information. Generally these are prepared for the general public. They show how the tax collection is spent and on what things they have invested along with the amount of the investment done on each project or program.
These reports will help everyone to know the overall performance of the government and nothings become under the veil.
The report is prepared by various methods, almost every law authority who prepare a statutory report opts some different ways. When preparing the annual statutory auditing report, here the GAAP (Generally Accepted Accounting Principles) are not followed. The entire scope and the performance of the government organization is explained under this report.The statutory auditors become elected when the board of directors vote them, those auditor before being elected to this job must have some top position in the hierarchy level of that government organization.