Differentiate between 'internal audit' and 'statutory audit'.

Some differences between statutory audit and internal audit. Appointment: Internal Auditor is appointed by the management of the organization while the statutory auditor is appointed by owners i.e. shareholder for a company. First statutory auditors of a company are appointed by the board of directors. Qualification: Qualifications of the statutory auditor are prescribed in the Companies Act, 1956. In case of a company, a practicing chartered Accountants or a firm of practicing chartered Accountants can only be appointed as a statutory auditor. There are no fixed qualifications for the position of an internal auditor. Objects: The main object of the statutory audit is to form an opinion on the financial statement of the organization. Auditor has to state that whether the financial statements are showing the true and fair view of the affairs of the organization or not. The main object of the internal audit is to detect and prevent the errors and frauds. Scope: The scope of the statutory audit is fixed by the Companies Act, 1956. It cannot be changed by mutual consent between the auditor and the management of the audited business unit. The scope of the internal audit is fixed by the mutual consent of the auditor and the management of the unit under audit. Report: The statutory auditor submits his report to the shareholder of the company in its general meeting. The internal auditor submits his report to the management of the company who is also his appointing authority. Removal: The procedure of removal of the statutory auditor is very complex. Only the company in the general meeting can remove the auditor. It requires the permission of the central government. Whereas, Internal auditor can be removed by the management without any permission of shareholders or Central Government.