Statutory Auditor

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Definition of statutory auditor

Statutory auditors, in most of the countries are referred to the external auditors or the external public accountants who are certified. A statutory auditor is an external or outside service supplier who has the responsibility to certify the financial statements in accordance to specific professional auditing standards like the ACA, ACCA, INSTOSAI standards.

The most common and widely used external audit standards are the International Standards on Auditing (ISA) of the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants and the US GAAP which is developed by the American Institute of Certified Public Accountants.


A statutory auditor is an auditor who is usually a part of the internal audit system that operates in one of the following areas and sometimes he may operate in more than one area. The following areas are:

  • Reviewing of the accounting and all the related internal controls. Therefore, the function of a statutory auditor is clearly defined where he is usually given the specific responsibility to review the accounting systems and the internal controls related to it and also to monitor all their operations while the management has the work of seeing the overall accounting system and its adequacy.
  • Reviewing of the financial as well as operating information that includes various functions like identifying, measuring, classifying and reporting all such information that specifically enquire individual items that includes detailed and thorough testing of transactions, balances and procedures.
  • A statutory auditor may have to examine the efficiency, effectiveness and economy of operations that may also include all the non financial controls.

Statutory audit refers to a legal requirement to review the financial records of a company or of the government, in order to check its fairness and accuracy. The use of statutory audit is not different from any other type of audit. Like other audits, the main purpose of the statutory audit’s is to find out whether the representation of the financial position of the organization is fair and accurate by studying the financial transactions, bank balances and book keeping records of the organization.

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