Statutory Audit

A Statutory audit is a legally required review into the accuracy of any company’s financial statements and records. Statutory comes from the word “statute” meaning law or regulation. These laws/regulations are put in place not only by the governments where the companies are based but also by the companies own board of directors.

The purpose of a statutory audit is to determine whether an organization provides a fair and accurate representation of its financial statements in an accordance with the applicable financial reporting framework.

In most cases, statutory audits are required for companies that hold public interest i.e., public entities such as government agencies and publicly traded/listed companies. It also includes banking institutions, insurance companies etc.

Companies with a turnover of 500million Uganda shillings and above are required to have audited financial statements.

The requirement to audit such entities stems from a regulation/law enacted through the corresponding regulating body for example insurance companies are required to be audited as per the requirements of the company’s act and the regulations of the Insurance Regulatory Authority (IRA).