Audit of a Cyprus Company
A statutory audit is an independent examination of a company's financial statements and records that is conducted in accordance with legal or regulatory requirements. The purpose of a statutory audit is to provide assurance to stakeholders such as shareholders, creditors, and regulators that the financial statements of the company accurately reflect its financial position and performance.
In most countries, statutory audits are mandatory for companies that meet certain criteria, such as reaching a certain level of revenue or having a certain number of shareholders. The specific requirements for statutory audits vary by country, but generally include an examination of the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as an assessment of the company's internal controls and compliance with accounting standards.
The statutory audit is typically carried out by an independent auditor, who is a professional with the necessary qualifications and experience to conduct the audit in accordance with the relevant laws and regulations. The auditor will review the company's financial records, accounts, and other relevant documents, and will test the information provided to ensure that it is accurate and complete. The auditor will also assess the company's internal controls to ensure that they are functioning properly and are adequate to prevent fraud and errors.
The statutory audit is an important process that provides assurance to stakeholders that the company's financial statements are accurate and reliable, and that the company is complying with the relevant laws and regulations. It is mandatory for public companies and also in many countries it is mandatory for private companies based on their size, nature of the business and number of shareholders.
It is important to note that statutory audits are different from internal audits that are carried out by the company's management and it is also different from tax audit which focus on compliance and tax.