Who is a Statutory Auditor? CA's role in the Statutory Audit

Statutory audit refers to a legal requirement to review a company's or government's financial records to confirm its equality and reliability. The use of statutory audit does not vary from any other audit form. Like other audits, the main purpose of the statutory audit is to determine if the description of the organization's financial position is fair and accurate by reviewing the organization's financial transactions, bank balances and book records.

Who is a Statutory Auditor?

In most countries, Statutory auditors are a part of the external audit process or certified professional public accountants. A statutory auditor is an independent or private service provider who is responsible for certifying the accounts in compliance with relevant professional auditing requirements such as ACA, ACCA. If the statutory auditor considers a comprehensive internal audit system in place, the scope of the audit may be reduced. Some important points about the auditor are:

i) A statutory auditor is entitled to access all the financial statements, documents, and data of the company. It ought to consistently be made accessible to him. He also has the right to seek additional information for his audit.

ii) He has the responsibility to submit a report from an auditor. In this, he will state whether the company's financial reports give their financial position and affairs a true and fair portrayal.

iii) When he writes a qualified document, i.e. the claims are not true and fair, he must state his reasons for the same thing clearly.

iv) If the auditor discovers some wrongdoing during his audit, he will have to report it to the authorities of the central government.

v) He will obey the auditing requirements in compliance with the ICAI guidelines when auditing and presenting the audit report.

The person must be a Chartered Accountant, i.e. a member of ICAI, in order to qualify as a statutory auditor. In the case of a company, most of its members must be chartered in their own right as accountants. The client may then be entitled to be in charge of a company's statutory audit. 

In any case, the unexpected truth is that Team of Chartered Accountants who have been doing Statutory Audit of banks according to RBI mandates for a considerable length of time have totally neglected to play out their obligation of uncovering NPA for which they were selected by RBI and open area banks. Or maybe it is CA who helps bank authorities in approval of advance to corrupt businesspeople by planning the ruddy accounting report according to the credit approach of individual banks. 

It is CA who, in conjunction with bank officials, used to classify and approve even bad assets as normal assets. If CA receives expensive gifts and is treated as a state guest and if CAs are regarded as' Damad–son-in-laws' during audit results, they may blindly place their signature on audit reports without looking into accounts.

It is an open mystery that it is CA that has approved all past balance sheets of all PS banks where NPA has been concealed, less provision has been made, and where profits have been inflated by clever bankers to satisfy finance ministry. It is worth mentioning here that the NPA volume of nearly all banks showed a big jump only after process adoption developed a mechanism for recognizing NPA. Also, it is notable to all that NPA was not made medium-term however was aggregated in the most recent two many years of reorganization period by sharp investors in nexus with a group of CA as it were. During the last four decades when all was done manually, CA could not stop a foul game of bank officials in consideration of bad assets. Therefore, one can not dream of such CAs ' corrupt team can avoid the tapering of the process if the bank officials attempt to hide bad assets at all.

Presently in this manner when the framework created NPA is pronounced, there is no utilization of completing the statutory review of banks. I am of the downright view that directing a statutory review of banks was a totally pointless and exorbitant exercise attempted by banks just to satisfy RBI standards.

Consequently, RBI ought to promptly stop compulsory statutory review of banks and this will spare crores of rupees of banks that are being spent on inspectors. What's more, RBI ought to likewise reevaluate halting Revenue review of branches being doing by Chartered Accountants just to satisfy RBI obligatory prerequisite.

If there should be an occurrence of need cross-checking of banks through officials of different banks and that of RBI might be depended on in guaranteeing the rightness of accounting report. Further shock review of banks by legit and dedicated RBI authorities may demonstrate supportive in making dread among awful investors.