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How does a propriety audit differ from a statutory audit?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Rashmitha asked about 3 years ago

How does a propriety audit differ from a statutory audit?

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2 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered almost 3 years ago

Propriety audit involves extensive verification not just of the numbers involved but also of the cause for the numbers. Usually based on the income and expenditure of an entity, propriety audit focusses on making sure that the funds are received from proper and authorised channels and those funds are spent for authorised purposes. This is usually done to check frivolous expenditure,revenue leakage, corruption etc to name a few. Reporting of a propriety audit is submitted to the person who appoints the Auditor.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

Dear Friend, Propriety audit involves extensive verification not just of the numbers involved but also of the cause for the numbers. Usually based on the income and expenditure of an entity, propriety audit focusses on making sure that the funds are received from proper and authorised channels and those funds are spent for authorised purposes. This is usually done to check frivolous expenditure,revenue leakage, corruption etc to name a few. Reporting of a propriety audit is submitted to the person who appoints the Auditor. Statutory audit is an all encompassing function where the emphasis is on providing a true and fair picture of the financial position of the entity. The focus is more on checking the arithmetical accuracy, grouping of certain transactions appropriately, compliance with the relevant standards and statutes and reporting it to the owners of the organisation.

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