Statutory Financial Statements

Statutory financial statements are your company’s official financial statements that are submitted to the regulatory authorities, across jurisdictions.

Statutory financial statements are the annual, quarterly or bi-annual consolidated financial statements of your company. These statements provide information on the income, expenses, balance sheets, budgets, and are reviewed by a statutory auditor. The preparation and requirements of these statements vary across jurisdictions and industries.

These statements cover:

• Income Statement: Includes revenue from operations, business expenses, profit or loss, income tax and earnings per share
• Balance Sheet: Includes details of your company’s assets, liabilities and shareholder equity
• Notes to Financial Statements: Accounting policies as well as the assumptions and methods of calculating key figures in the financial statements
• Report of the Statutory Auditor: An audit verification document by a statutory auditor

Why is Statutory Financial Statements important for business today?

Statutory financial statements enable your company to:

• Track the financial health of your company and benchmark it against your peers
• Mitigate any legal and operational risks related to any regulatory non-compliance across jurisdictions
• Provide information on your company’s financial performance, investments, loans and executive compensation to your stakeholders and regulators
• Formulate effective strategies to achieve both short and long-term financial objectives
• Improve your company’s corporate governance

Why is it important for an event tomorrow?

Statutory financial statements are important for an event tomorrow, as they help:

• Evaluate current and future tax liabilities and other obligations of your company
• Validate the financial data published by your company, authenticated by a certified auditor
• Assess financial performance to understand the reasons for any volatility and estimate the future earning potential of your company
• Evaluate your company’s profitability and potential to scale
• Understand expenses that are critical for due diligence
• Benchmark the financial performance of your company against competitors
• Assess details of the accounting policies used to prepare these statements and ensure consistency

Pros of addressing Statutory Financial Statements

• A comprehensive and consolidated view of your company overall
• Aid in forecasting financial performance of your company by leveraging historical trends
• Transparency between regulatory authorities and your company
• Obtain funding and loans quicker by providing audited financial statements of your company
• Provision of up-to-date financial statements to internal and external stakeholders and regulators across jurisdictions

Cons of not addressing this topic

• Increase in exposure to risk of liabilities, fines and litigation due to non-submission of statements
• Hampering of transparency between your company and shareholders
• Increased time and cost of due diligence for both internal company management and potential investors

Also learn about

• Accounting Policies
• Acquisition and Disposal Documents
• Aged Creditors Report
• Aged Debtors Report
• Aged Inventory Report
• Audit Correspondence

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