Statutory Audit Vs Cost Audit
Statutory Audit and Cost Audit are two distinct types of financial audits with different purposes and legal requirements.
Statutories audit are a mandatory audit conducted in accordance with the law for all companies in India.
Its objective is to verify that a company’s financial statements provide a true and fair view of its financial position and performance. Independent auditors, appointed by the shareholders or board of directors, carry out statutory audits.
The primary goal is to provide assurance to stakeholders that the financial statements are reliable and accurate.
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Conversely, cost audit is conducted to ensure the accuracy of cost accounting records and compliance with cost accounting standards.
It is obligatory for certain industries specified by the government, including manufacturing, mining, and processing companies.
Cost audits aim to assess the precision of cost accounting records and determine adherence to government-mandated cost accounting standards.
To summarize, statutory audits focuses on the overall financial statements of a company, while cost audits specifically targets the accuracy of cost accounting records and compliance with cost accounting standards.