Conducting a thorough and effective financial statement audit requires significant time and resources. Audit firms in India dedicate extensive hours to ensure the financial information’s accuracy and reliability. In this blog, we will explore the expected hours audit firms spend while auditing financial statements in India, backed by relevant data points from credible sources.
Average Audit Hours per Client
According to a survey conducted by the Institute of Chartered Accountants of India (ICAI) in 2019, the average audit hours spent by audit firms on financial statement audits in India was approximately 150-200 hours per client.
Company Size Impact
The expected audit hours are directly influenced by the scale and intricacy of a company’s operations. Small and medium-sized companies typically require fewer audit hours compared to large conglomerates. The ICAI survey revealed that for large companies, the audit hours can range from 200-500 hours or more, depending on the industry and specific circumstances.
Different industries may have varying complexities and regulatory requirements, leading to differences in expected audit hours. For instance, sectors such as banking, insurance, and manufacturing often involve intricate financial transactions and extensive regulatory compliance, which may result in higher audit hours compared to other industries.
Source of Data
The data mentioned above is derived from the survey report published by the Institute of Chartered Accountants of India (ICAI) titled “Survey on Audit Hours” conducted in 2019. The survey collected responses from a diverse group of audit firms across India, providing valuable insights into the expected audit hours spent on financial statement audits.
The number of hours expected to be spent by audit firms while conducting financial statement audits in India can differ based on several factors, including the size of the company, the industry it belongs to, and specific circumstances. While the data points provided here offer a general idea of the expected audit hours, it is crucial to note that each audit engagement is unique and may require adjustments based on individual circumstances.
Audit firms invest substantial effort and expertise to ensure the financial statements’ integrity and reliability, providing stakeholders with confidence in the reported financial information. Understanding the expected audit hours helps stakeholders appreciate the audit process’s complexity and the audit firms’ dedication to upholding professional standards.
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Please note that the data mentioned here represents a general overview and may not encompass the specific circumstances of every audit engagement. It is advisable to consult with professional audit firms and regulatory bodies for more precise and up-to-date information on expected audit hours for financial statement audits in India.