Internal Audit vs Statutory

Though there is an accountant
in all organizations to record
the financial transactions and
for general book keeping,
companies have to pass
through an audit that is a sort
of scrutiny of the financial
statements of the company
prepared by the accountant.
This statutory audit is carried
out under the provisions of the
Companies Act 1956 (to give
opinions under section 227 of
the Act). This statutory audit is
a tool to safeguard the
interests of the shareholders of
the company to ensure that that
the organization is performing
satisfactorily financially.

However, there are companies
that get performed an internal
audit also to ensure they are
following the rules and
regulations of accounting and
to verify the statements
prepared by accountants. There
are many differences in an
internal audit and statutory
audit and these will be
highlighted in this article.
Internal audit is not mandatory
and it is the choice of the
management of the company to
get it done by its internal
auditors. Management does not
want to be red faced in case of
any irregularities when
statutory audit is conducted
which is why, to keep a check on
the operations of the company,
internal audit is done. Whether
an internal audit has been
carried out or not, statutory
audit is done that comments on
the effectiveness of the
financial statements of the
company. It is necessary to
ensure that the company is
following the rules and
regulations in maintaining its
books and there is no
compromise with the financial
interests of the shareholders.

The most obvious difference
lies in the appointment of the
auditor. While internal auditors
are appointed by the
management of the company,
statutory auditors are
appointed by the shareholders
of the company. Another
difference lies in the
qualifications of the auditors.
While it is mandatory for
statutory auditors to be
certified chartered accountants,
it is not necessary for internal
audit and the management may
appoint persons it deems fit.

The main objective of statutory
audit is to give a fair and
impartial assessment of the
financial performance of the
organization while at the same
time try to spot any
discrepancies and frauds.
Internal audit also tries to
detect any anomalies and errors
that may have crept in the
financial statements. There is no
way internal management can
change the scope of statutory
audit as is the case with internal
audit where the mutual consent
of the management and the
auditors is enough to decide
the scope of the audit exercise.
While the auditors of a
statutory audit submit their
final report to the shareholders
in their general meeting, the
report of the internal audit is
handed over to the
management by the auditors.
Once appointed, statutory
auditor is extremely hard to get
removed and the management
has to take permission of the
central government after its
board of directors recommends
a proposal to this effect. On the
other hand, management can at
any time remove internal


Tips for passing CPT Dec 2013

(share it to help others )

Here, I have given 7 most important tips for CPT Exam. Kindly consider to crack CPT in first shot.

1) Most IMP: Remember you will have to get at least 30% in all subject, so till last attempt, generally CPT students were leaving Matches & statistic totally, but you cannot do so as 30% rule is applicable. 

2) Accounting: Accounting is the scoring subject for CPT exam. If your account is well then your chances of cracking CPT is very high. In Accounting before starting revision of chapters/sums, first study whole theory of that chapter and then solve at least 1 or 2 questions from examples.

3) Mercantile Law: Prepare Mercantile Law thoroughly, don’t miss any topic, refer all the acts applicability date & definition. Because it was the only scoring subject after accounts. Contract Act is important one.

4) Economics: In economics 1st complete Macroeconomics then go for micro economics. Macro Economics is also very scoring.

5) Quantitative Aptitude (Math’s & Statistics): In Mathematics, first do the easy chapters which you had learned in school during 8, 9, and 10; In Statistics, don’t miss Differentiation and integration, Correlation and regression and theoretical distribution as these are the important one.

6) How many answers to tick ? This is the most obvious question to most of the CPT students. I will recommend you to tick mark around 160 – 170 minimum if your preparation is not good enough. Don’t do foolish thing of marking all of 200 questions otherwise you may be failed with 7 – 10 marks missing. I have personally seen peoples who tick mark all of them and fails, recently my friend had done the same mistake and he got 94 and failed and his brother had ticked 168 and he got 100 marks and was the luckiest CPT cracker. So, please keep this thing in mind. If you are well prepared then you don’t need to keep such restriction.

7) Be confident & Hard-worker: Last but not least study hard and do the hard work only because there is no substitute of hard work. And refer our most wanted article:- >How You Can Pass CA CPT Exams in 1st Attempt Easily
Best of Luck (y)


Study Material of Paper 8: Indirect Tax Laws for students appearing in May, 2014 examination

Students appearing in May, 2014 examination may note that the Study Material of Paper 8: Indirect Tax Laws relevant for November, 2014 examination (prepared in accordance with the revised syllabus) is also relevant for May, 2014 examination subject to the modifications set out below.

Students, appearing in May, 2014 examination, are advised to prepare for their examination from the Revised Study Material in the following manner:

(i) Ignore Chapter 16 – Foreign Trade Policy in Section C: Customs and Foreign Trade Policy of the Study Material [as it is included only in the revised syllabus]; and

(ii) Refer to Chapters 1 – 8 relating to VAT and Inter-relationship of accounting with excise, customs and service tax grouped together under the Appendix given at the end of the Study Material [as these Chapters are included in the old syllabus but do not form part of the revised syllabus]. The Appendix is, however, not relevant for students appearing in November, 2014 examination under the revised syllabus.

The Study Material based on the Revised Syllabus of Paper 8: Indirect Tax Laws of Final Course is now available on the BoS Knowledge Portal at the Institute’s website. The Revised Study Material can be accessed from http://www.icai.org/post.html?post_id=5777.

The law stated in the Study Material is updated with the amendments made vide the Finance Act, 2013 and notifications/circulars issued till April 30, 2013.