How does a propriety audit differ from a statutory audit?

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.

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.