Statutory Audit
The term “statutory auditor” refers to an external auditor whose appointment is mandated by law. A “statutory audit” is a legally required review of the accuracy of a company’s or government’s financial records.
- Statutory Audit is the audit made compulsory by the law.
- Carried out by External Auditor
- Audit of Full Accounting records.
- Purpose to ensure reliability and transparency of financial statement.
Tax Audit
Tax Audit is a conditional audit, conducted under the regulations of Income Tax Act. The Act states that if the turnover of any enterprise is more than 1 crore, and in case of professionals if the value of services is more than Rs. 50 lacs then they have to get their books of accounts audited by a Chartered Accountant.
The only exemption here is if the enterprise has opted for the Presumptive Taxation scheme, then the entity does not have to get its books of accounts audited.