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Raman asked 1 year ago

Council guideline chapter 9 would also apply on receiving fees from subsidiary of specified companies??

1 Answers
RaviRavi Staff answered 1 year ago

In council guidelines we have chapter 9 for statutory audit fees of company and public sector undertakings like LIC

it says fees of other assignments should not exceed statutory audit fees

then they specify some work is excluded from other assignments, while applying this rule that’s good for auditor

now question is whether calculation should be should be done for individual company or we should take into consideration group companies like subsidiary, associate etc

we have to do it individual company wise

but we have to consider ca firm & its associate concern receiving all the fees

associate concern for ca firm in short means entities where partners or their relatives hold substantial interest

so if company is paying 5 crore audit fees to ABC & Co and also paying 3 crore fees for other assignments. Further same company is paying 2.5 crore to PQR & Co which is associate concern

then for comparison

we will take statutory audit fees as 5 crore

other assignment fees as 3 crore + 2.5 crore = 5 crore

that will be non compliance of council guidelines

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