Section 142 of the Companies Act, 2013 provides for remuneration of auditors.
WHO WILL FIX THE REMUNERATION?
In case of First Auditor
Remuneration of the first auditor shall be fixed by the board, which appointed him.
In case of Subsequent auditors
The remuneration of subsequent auditors shall be fixed by the company in general meeting or in such manner as the general meeting may determine.
INCLUSION AND EXCLUSIONS
Inclusion
The remuneration so fixed is, in addition to the fee payable to an auditor to and it includes the expenses, if any, incurred by him in connection with the audit of the company (i.e. out of pocket expense) and any facility extended to him.
Exclusion
It is not to include any remuneration paid to him for any other service rendered by him at the request of the company.
Who pays auditors remuneration?
- When an auditor is appointed by the Board of Directors, (First auditors and Casual vacancy), the remuneration is fixed by the board of directors.
- When an auditor is appointed by the Central Government, the Central government fixes the remuneration.
How is audit fee calculated?
Audit fees shall generally be based upon the degree of responsibility, risk and skill involved and the time necessarily occupied on the work.
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