# Statutory auditor > Mediated Wiki article. Canonical URL: https://mediated.wiki/source/Statutory_auditor > Markdown URL: https://mediated.wiki/source/Statutory_auditor.md > Source: https://en.wikipedia.org/wiki/Statutory_auditor > Source revision: 1322443970 > License: Creative Commons Attribution-ShareAlike 4.0 International (https://creativecommons.org/licenses/by-sa/4.0/) Auditor when appointed as mandated by law Statutory auditor (1762) **Statutory auditor** is a title used in various countries to refer to a person or entity with an [auditing](/source/Audit) role, whose appointment is mandated by the terms of a [statute](/source/Statute). ## World usage Main article: [External auditor](/source/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 – 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.[1] The [European Union](/source/European_Union) has also made efforts to mandate statutory audits and statutory auditors on an EU-wide level.[2] ### By country #### India In [India](/source/India), the term "statutory auditor" refers to an [external auditor](/source/External_auditor) whose appointment is mandated by law.[*[citation needed](https://en.wikipedia.org/wiki/Wikipedia:Citation_needed)*] #### Japan A *statutory auditor* (監査役, *kansayaku*) is an official found in [Japanese](/source/Japan) *[kabushiki gaisha](/source/Kabushiki_gaisha)* (business corporations). Similar roles are also found in [Taiwan](/source/Taiwan) and [South Korea](/source/South_Korea), which use modified forms of Japanese [corporate law](/source/Corporate_law), although the English translation most commonly employed for the role in these countries is *[supervisor](/source/Supervisor)* or *[supervisory board](/source/Supervisory_board)*.[3] Statutory [auditors](/source/Auditor) are elected by shareholders and hold a position in the hierarchy alongside the [board of directors](/source/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](/source/Articles_of_incorporation). If the company is classified as a "large" company (i.e. with more than ¥500 million in [paid-in capital](/source/Paid-in_capital) or ¥20 billion in [liabilities](/source/Liability_(financial_accounting))), it must have three statutory auditors, or an audit, compensation and [nominating committee](/source/Nominating_committee) system similar to that used by [public companies](/source/Public_companies) in the US. Statutory auditors have several functions: 1. They initiate [derivative suits](/source/Derivative_suit) against the [board of directors](/source/Board_of_directors) on behalf of the [shareholders](/source/Shareholder), 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](/source/Daiwa_Bank), groups of shareholders can now file suits themselves without going through the auditor. 1. 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. 1. In "mid-size" companies, they audit the financial reports submitted by the company. 1. In "large" companies, they oversee auditing performed by external [certified public accountants](/source/Certified_public_accountant), i.e. [external auditors](/source/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](/source/Keiretsu)* partners). The role of the statutory auditor in Japan is distinct from the role of an [external auditor](/source/External_auditor) or [internal auditor](/source/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](/source/Olympus_scandal).[4] The Japanese association of statutory auditors has recommended adopting the English title "audit & supervisory board member" to avoid such confusion.[3] ## References 1. **[^](#cite_ref-1)** ["Register of Statutory Auditors"](http://www.auditregister.org.uk/Forms/Default.aspx). Retrieved 21 August 2013. 1. **[^](#cite_ref-2)** ["Green Paper: The Role, The Position and the Liability of the Statutory Auditor Within the European Union"](http://europa.eu/documents/comm/green_papers/pdf/com96_338_en.pdf) (PDF). European Union. Retrieved 21 August 2013. 1. ^ [***a***](#cite_ref-kansayakukai_3-0) [***b***](#cite_ref-kansayakukai_3-1) ["Background and Goals: New Recommended English translation of "Kansayaku" and "Kansayaku-kai""](http://www.kansa.or.jp/en/New_Recommended_English_translation_of_Kansayaku_and_Kansayaku-kai.pdf) (PDF). Japan Audit & Supervisory Board Members Association. Retrieved 21 August 2013. 1. **[^](#cite_ref-4)** Chambers, Richard. ["Setting the Record Straight: The Real Internal Auditors at Olympus Have Not Been Implicated"](http://www.theiia.org/blogs/chambers/index.cfm/post/Setting%20the%20Record%20Straight:%20The%20Real%20Internal%20Auditors%20at%20Olympus%20Have%20Not%20Been%20Implicated). Retrieved 21 August 2013. Authority control databases International GND 2 3 National Japan Other Yale LUX --- Adapted from the Wikipedia article [Statutory auditor](https://en.wikipedia.org/wiki/Statutory_auditor) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/Statutory_auditor?action=history)). Available under [Creative Commons Attribution-ShareAlike 4.0 International](https://creativecommons.org/licenses/by-sa/4.0/). Changes may have been made.