{{Short description|Auditor when appointed as mandated by law}} [[File:Иллюстрация к статье «Аудиторы» № 1. Военная энциклопедия Сытина (Санкт-Петербург, 1911-1915).jpg|thumb|255px|Statutory auditor (1762)]]
'''Statutory auditor''' is a title used in various countries to refer to a person or entity with an [[audit]]ing role, whose appointment is mandated by the terms of a [[statute]].
==World usage== {{main|External auditor}} A "statutory audit" is a legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit{{snd}}to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions.<ref>{{cite web|title=Register of Statutory Auditors|url=http://www.auditregister.org.uk/Forms/Default.aspx|accessdate=21 August 2013}}</ref> The [[European Union]] has also made efforts to mandate statutory audits and statutory auditors on an EU-wide level.<ref>{{cite web|title=Green Paper: The Role, The Position and the Liability of the Statutory Auditor Within the European Union|url=http://europa.eu/documents/comm/green_papers/pdf/com96_338_en.pdf|publisher=European Union|accessdate=21 August 2013}}</ref>
===By country=== ====India==== In [[India]], the term "statutory auditor" refers to an [[external auditor]] whose appointment is mandated by law.{{citation needed|date=April 2021}}
====Japan==== A {{Nihongo|''statutory auditor''|監査役|kansayaku}} is an official found in [[Japan]]ese ''[[kabushiki gaisha]]'' (business corporations). Similar roles are also found in [[Taiwan]] and [[South Korea]], which use modified forms of Japanese [[corporate law]], although the English translation most commonly employed for the role in these countries is ''[[supervisor]]'' or ''[[supervisory board]]''.<ref name=kansayakukai />
Statutory [[auditor]]s are elected by shareholders and hold a position in the hierarchy alongside the [[board of directors]]. A kabushiki kaisha must have at least one statutory auditor, unless the transfer of shares is restricted in the [[articles of incorporation]]. If the company is classified as a "large" company (i.e. with more than ¥500 million in [[paid-in capital]] or ¥20 billion in [[liability (financial accounting)|liabilities]]), it must have three statutory auditors, or an audit, compensation and [[nominating committee]] system similar to that used by [[public companies]] in the US.
Statutory auditors have several functions:
# They initiate [[derivative suit]]s against the [[board of directors]] on behalf of the [[shareholder]]s, and represent the company in those suits. This right was once reserved for the auditor; however, following precedent from a recent lawsuit against [[Daiwa Bank]], groups of shareholders can now file suits themselves without going through the auditor. # In "mid-size" and "large" companies (i.e. with more than ¥100 million of paid-in capital), they have the right to attend board meetings to monitor the directors' actions. # In "mid-size" companies, they audit the financial reports submitted by the company. # In "large" companies, they oversee auditing performed by external [[certified public accountant]]s, i.e. [[external auditors]].
Statutory auditors are often selected from among the senior management of the company, or are former directors of related companies (such as suppliers or ''[[keiretsu]]'' partners).
The role of the statutory auditor in Japan is distinct from the role of an [[external auditor]] or [[internal auditor]] as understood in English-speaking countries, which has led to some confusion when discussing their role in internationally prominent cases such as the [[Olympus scandal]].<ref>{{cite web|last=Chambers|first=Richard|title=Setting the Record Straight: The Real Internal Auditors at Olympus Have Not Been Implicated|url=http://www.theiia.org/blogs/chambers/index.cfm/post/Setting%20the%20Record%20Straight:%20The%20Real%20Internal%20Auditors%20at%20Olympus%20Have%20Not%20Been%20Implicated|accessdate=21 August 2013}}</ref> The Japanese association of statutory auditors has recommended adopting the English title "audit & supervisory board member" to avoid such confusion.<ref name=kansayakukai>{{cite web|title=Background and Goals: New Recommended English translation of "Kansayaku" and "Kansayaku-kai"|url=http://www.kansa.or.jp/en/New_Recommended_English_translation_of_Kansayaku_and_Kansayaku-kai.pdf|publisher=Japan Audit & Supervisory Board Members Association|accessdate=21 August 2013}}</ref>
==References== {{reflist}}
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{{DEFAULTSORT:Statutory Auditor}} [[Category:Japanese business terms]] [[Category:Japanese business law]] [[Category:Auditing]]