Difference between Statutory Audit and Secretarial compliance


 What is Statutory Audit and why is important

A statutory audit is an independent examination of a company's financial statements and financial reporting procedures. The purpose of a statutory audit is to ensure that a company's financial statements are accurate and in compliance with applicable laws and regulations. 

Statutory audits are conducted by certified public accountants (CPAs) who are independent of the company being audited. The CPA will review a company's financial statements and financial reporting procedures and compare them to the applicable laws and regulations. If the CPA finds any discrepancies, they will report their findings to the company's shareholders.

  • A statutory audit is important because it provides investors and other interested parties with the assurance that a company's financial statements are reliable.

What is Secretarial compliance and why is important

Secretary compliance is the process of ensuring that a company or organization is adhering to all of the relevant laws and regulations. This includes filing the proper paperwork, keeping up with changes in the law, and making sure that the company is in compliance with all applicable standards.

  • Failing to comply with the law can lead to serious consequences, including hefty fines, damage to the company's reputation, and even jail time. In some cases, non-compliance can also put the company at risk of being shut down entirely.
  • Secretarial compliance may not be the most exciting topic, but it is absolutely essential for any company that wants to stay on the right side of the law. 
  • By taking the time to ensure that your company is compliant, you can avoid a world of trouble down the road.

Difference between Statutory Audit and Secretarial compliance

The key difference between statutory audit and secretarial compliance is that a statutory audit is an evaluation of a company's financial statements by an external auditor whereas secretarial compliance is the compliance of the company with the statutory and legal requirements.

A statutory audit is an important part of a company's financial reporting process. It is conducted by an external auditor who reviews the financial statements to ensure that they are accurate and in compliance with generally accepted accounting principles (GAAP). Secretarial compliance, on the other hand, is the compliance of the company with the statutory and legal requirements. This includes filing annual reports, maintaining corporate minutes, and holding annual general meetings. Secretarial compliance is important to maintain the legal status of the company.

Why do you need to hire a Professional advisor for Secretarial Compliance?

At ASC, we have Company Secretaries and other experienced experts who understand Indian company law, assist in Secretarial Compliance and Secretarial Audit matters, and keep up to date with the regulatory environment in India, assisting our clients in forming companies under the Companies Act as soon as possible.

Location: India

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