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{{Short description|Auditor when appointed as mandated by law}} |
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[[File:Иллюстрация к статье «Аудиторы» № 1. Военная энциклопедия Сытина (Санкт-Петербург, 1911-1915).jpg|thumb|255px|{{PAGENAME}} (1762)]] |
[[File:Иллюстрация к статье «Аудиторы» № 1. Военная энциклопедия Сытина (Санкт-Петербург, 1911-1915).jpg|thumb|255px|{{PAGENAME}} (1762)]] |
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'''Statutory auditor''' is a title used in various countries to refer to a person or entity with an [[audit]]ing role, whose appointment is mandated by the terms of a [[statute]]. |
'''Statutory auditor''' is a title used in various countries to refer to a person or entity with an [[audit]]ing role, whose appointment is mandated by the terms of a [[statute]]. |
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in India, the appointment of a statutory auditor is governed by Companies Act 2013 and approved by Company's members at Annual General Meeting (commonly abriveated as AGM) to be held on or before 30th September of the closing of financial year. |
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==World usage== |
==World usage== |
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{{main|External auditor}} |
{{main|External auditor}} |
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A "statutory audit" is a legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit{{snd}}to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions.<ref>{{cite web|title=Register of Statutory Auditors|url=http://www.auditregister.org.uk/Forms/Default.aspx|accessdate=21 August 2013}}</ref> The [[European Union]] has also made efforts to mandate statutory audits and statutory auditors on an EU-wide level.<ref>{{cite web|title=Green Paper: The Role, The Position and the Liability of the Statutory Auditor Within the European Union|url=http://europa.eu/documents/comm/green_papers/pdf/com96_338_en.pdf|publisher=European Union|accessdate=21 August 2013}}</ref> |
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In India, the appointment of a statutory auditor is governed by section 139 of the Companies Act 2013. The Companies Act in India mandate that the matter of appointment (except the first auditor in case newly incorporated company) shall be first placed at the Board of Directors meeting followed by final approval from the shareholders at AGM. |
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The statutory auditor may be a natural person or an entity. There are criteria for appointment of the statutory auditor. The Companies Act 2013 also mandated that every company shall appoint a statutory auditor at the AGM to be held on or before 30th September every year after the closing of the financial year to hold office from the conclusion of AGM in which matter of his appointment has been placed till the conclusion of sixth AGM. |
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As statutory auditor appointed to perform audit function and also to check, asses, make an opinion on the financial statements of the company. |
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===By country=== |
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====India==== |
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In [[India]], the term "statutory auditor" refers to an [[external auditor]] whose appointment is mandated by law.{{citation needed|date=April 2021}} |
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====Japan==== |
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A {{Nihongo| |
A {{Nihongo|''statutory auditor''|監査役|kansayaku}} is an official found in [[Japan]]ese ''[[kabushiki gaisha]]'' (business corporations). Similar roles are also found in [[Taiwan]] and [[South Korea]], which use modified forms of Japanese [[corporate law]], although the English translation most commonly employed for the role in these countries is ''[[supervisor]]'' or ''[[supervisory board]]''.<ref name=kansayakukai /> |
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Statutory [[auditor]]s are elected by shareholders and hold a position in the hierarchy alongside the [[board of directors]]. A kabushiki kaisha must have at least one statutory auditor, unless the transfer of shares is restricted in the [[articles of incorporation]]. If the company is classified as a "large" company (i.e. with more than ¥500 million in [[paid-in capital]] or ¥20 billion in [[liability (financial accounting)|liabilities]]), it must have three statutory auditors, or an audit, compensation and [[nominating committee]] system similar to that used by [[public companies]] in the US. |
Statutory [[auditor]]s are elected by shareholders and hold a position in the hierarchy alongside the [[board of directors]]. A kabushiki kaisha must have at least one statutory auditor, unless the transfer of shares is restricted in the [[articles of incorporation]]. If the company is classified as a "large" company (i.e. with more than ¥500 million in [[paid-in capital]] or ¥20 billion in [[liability (financial accounting)|liabilities]]), it must have three statutory auditors, or an audit, compensation and [[nominating committee]] system similar to that used by [[public companies]] in the US. |
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Statutory auditors are often selected from among the senior management of the company, or are former directors of related companies (such as suppliers or ''[[keiretsu]]'' partners). |
Statutory auditors are often selected from among the senior management of the company, or are former directors of related companies (such as suppliers or ''[[keiretsu]]'' partners). |
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The role of the statutory auditor in Japan is distinct from the role of an [[external auditor]] or [[internal auditor]] as understood in English-speaking countries, which has led to some confusion when discussing their role in internationally prominent cases such as the [[Olympus scandal]].<ref>{{cite web|last=Chambers|first=Richard|title=Setting the Record Straight: The Real Internal Auditors at Olympus Have Not Been Implicated|url=http://www.theiia.org/blogs/chambers/index.cfm/post/Setting%20the%20Record%20Straight:%20The%20Real%20Internal%20Auditors%20at%20Olympus%20Have%20Not%20Been%20Implicated|accessdate=21 August 2013}}</ref> The Japanese association of statutory auditors has recommended adopting the English title " |
The role of the statutory auditor in Japan is distinct from the role of an [[external auditor]] or [[internal auditor]] as understood in English-speaking countries, which has led to some confusion when discussing their role in internationally prominent cases such as the [[Olympus scandal]].<ref>{{cite web|last=Chambers|first=Richard|title=Setting the Record Straight: The Real Internal Auditors at Olympus Have Not Been Implicated|url=http://www.theiia.org/blogs/chambers/index.cfm/post/Setting%20the%20Record%20Straight:%20The%20Real%20Internal%20Auditors%20at%20Olympus%20Have%20Not%20Been%20Implicated|accessdate=21 August 2013}}</ref> The Japanese association of statutory auditors has recommended adopting the English title "audit & supervisory board member" to avoid such confusion.<ref name=kansayakukai>{{cite web|title=Background and Goals: New Recommended English translation of "Kansayaku" and "Kansayaku-kai"|url=http://www.kansa.or.jp/en/New_Recommended_English_translation_of_Kansayaku_and_Kansayaku-kai.pdf|publisher=Japan Audit & Supervisory Board Members Association|accessdate=21 August 2013}}</ref> |
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==References== |
==References== |
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Statutory auditor is a title used in various countries to refer to a person or entity with an auditing role, whose appointment is mandated by the terms of a statute.
A "statutory audit" is a legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit – to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions.[1] The European Union has also made efforts to mandate statutory audits and statutory auditors on an EU-wide level.[2]
InIndia, the term "statutory auditor" refers to an external auditor whose appointment is mandated by law.[citation needed]
Astatutory auditor (監査役, kansayaku) is an official found in Japanese kabushiki gaisha (business corporations). Similar roles are also found in Taiwan and South Korea, which use modified forms of Japanese corporate law, although the English translation most commonly employed for the role in these countries is supervisororsupervisory board.[3]
Statutory auditors are elected by shareholders and hold a position in the hierarchy alongside the board of directors. A kabushiki kaisha must have at least one statutory auditor, unless the transfer of shares is restricted in the articles of incorporation. If the company is classified as a "large" company (i.e. with more than ¥500 million in paid-in capital or ¥20 billion in liabilities), it must have three statutory auditors, or an audit, compensation and nominating committee system similar to that used by public companies in the US.
Statutory auditors have several functions:
Statutory auditors are often selected from among the senior management of the company, or are former directors of related companies (such as suppliers or keiretsu partners).
The role of the statutory auditor in Japan is distinct from the role of an external auditororinternal auditor as understood in English-speaking countries, which has led to some confusion when discussing their role in internationally prominent cases such as the Olympus scandal.[4] The Japanese association of statutory auditors has recommended adopting the English title "audit & supervisory board member" to avoid such confusion.[3]
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