47. Distinction between Management Audit and Statutory Audit
The statutory Audit is examining the accounts as per provisions of law but management audit is concerned with audit of performance of functions of management. Following are the points of difference
Management Audit
Statutory Audit
1. The management auditor examines the performance of management and makes suggestions to improve it in the future.
2. The Conduct of management audit is optional and voluntary. There is no legal compulsion in this regard so far.
3. The management auditor is answerable to management only.
4. No qualification has been fixed for the management auditor.
5. The management audit is an aid to management.
6. The management audit may cover more than
1. Statutory Audit reports on the financial aspects of an organization indicating whether financial statements show a true and fair view of state of affairs for a particular period.
2. The audit of financial accounts is legally compulsory for a joint stock of company.
3. The Statutory auditor is accountable to the shareholders and authorities under the Act.
4. The statutory auditor must be a Chartered accountant and emphasis is on independent report on financial matters.
5. It is a check on management.
6. It is conducted for a particular accounting
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one financial year.
7. The management auditor critically examines the past as well as looks to future activities of management.
8. The management auditor’s work begins where the work of statutory auditor ends.
9. The management audit is concerned with making activities of management more effective and efficient.
period.
7. The statutory reviews historical record only.
8. The work of statutory auditor ends with reporting on financial records.
9. It is not concerned with management’ performance.
Tax Audit
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