1) Both are carried out by qualified auditors.

2) They involve the assessment of the internal control system.

3) They facilitate detection of errors and frauds.

4) Reports issued by the auditors can be used by third parties.


Statutory Audits

1. It is a requirement of an Act of parliament e.g. the Companies Act.

2. The scope and objective of work is defined in the Act

3. The report is addressed to the shareholders.

4. Appointment of the auditor is stipulated in the Act (Sec.159). It can either be by

shareholders, directors or registrar of companies.

5. The auditor is liable to third parties.

6. The auditor has full independence.