Statutory Audit Vs Private Audit.?

Question

Differentiate between Statutory Audit & Private Audit

Answer 1

The word statutory normally means required by law. Hence a statutory audit is the requirement to continue a company in its business as per the law and standards of accounting of the land / international standard and may often be made available to the public.

Private audits are conducted by large companies for purposes of their own with a specific goal and achieving a standard and awareness among its employees for excellence.

Answer 2

A statutory audit is mandated by law and must follow all the prevailing accounting standards. The results are filed with the authorities, and may or may not be available to the public, depending on whether it's a listed or private company.

A private audit is one commissioned for a specific purpose and the results are known only to those who commissioned it. It may or may not need to produce the full financial statements, depending on its purpose. It may be just an audit of inventories, or accounts receivable, or of revenues, etc.