Limitations of statutory audits

1. The expenditure of an audit can be very high. However, if the audit firm is already
hired to carry out non-audit work such as accounts preparation oradvisory work, the
additional cost of an audit may be fairly small.
2. The disruption caused to a companys staff during the audit. The companys staff
may be required to support the auditors by answering questions, providing
documents and other information, and so on.
3. Financial information includes subjective and judgemental matter.
4. Inherent limitation of control used as audit evidence. The audit cannot give you an
hundred percent assurance that financial statements are correct and there is no
mistake in financial statement. The reason is that audit has many inherent limitations.
The types of inherent limitation of audit like Time Bound Job, Auditor is not master,
Frauds are planned, limited power of auditor.
5. Representations from management may have to be relied upon as the only source of
evidence in some areas.
6. Evidence is persuasive not conclusive. Audit evidence is therefore typically
persuasive rather than conclusive. The main aim of audit evidence is to be
reasonable and not necessarily absolute.
7. Do not review 100% of the transaction. Auditors express opinion and therefore does
not give total assurance of the true fair presentation of annual reports.
8. An audit does not assure future viability of the organization audited.
9. An audit does not assure the effectiveness and efficiency of management.