What is Statutory Audit? Meaning, Example & Uses

What is Statutory Audit explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Statutory Audit is a term you will often come across in Company Law. This guide explains what Statutory Audit means, gives a simple example, and shows why it matters for taxpayers and businesses — in plain English.

What is Statutory Audit?

Statutory Audit is a legally mandated audit of a company's financial statements by an independent chartered accountant to ensure they are true and fair.

In practical terms, Statutory Audit is a company-law concept — it governs how companies are formed, managed or how their decisions are made. Understanding it helps you read financial documents, stay compliant and make better decisions.

Statutory Audit explained with an example

Every company must have its annual accounts examined in a statutory audit before filing with the RoC. Examples like this make it easier to see how Statutory Audit works in real situations.

Why Statutory Audit matters

A statutory audit gives shareholders and regulators assurance on the reliability of the accounts.

Statutory Audit at a glance

Key points to remember

• Where it applies: Company Law
• In short: A legally mandated audit of a company's financial statements by an independent chartered accountant to ensure they are true and fair.
• Why it matters: A statutory audit gives shareholders and regulators assurance on the reliability of the accounts.

Related terms

If you are learning about Statutory Audit, these related terms are worth knowing too:

• Tax Audit
• Internal Audit
• CARO