What is a statutory audit and for whom is it intended?
A statutory audit is an independent verification of the accounting statements. It checks whether the presented financial statements are true and faithful and whether they comply with the applicable regulations.
It checks correct use of the accounting procedures when capturing the economic operations. The objective of the audit is to improve the credibility of the accounting information of companies which publish their financial statements. The audit obligation is regulated by the Accounting Act no. 563/1991 Sb. (Collection of Laws), as amended, Section 20. All accounting entities are not obliged to have their financial statements audited. Only legal entities are obliged to do so; individuals are not obliged to perform an audit.
The criterion for the performance of an audit is:
- total assets exceeding CZK 40 million,
- annual total net sales exceeding CZK 80 million,
- average number of FTEs exceeding 5