Fees to statutory auditor

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This discussion clarifies how to account for fees paid to a statutory auditor for issuing a certificate related to a company's related party transactions. Experts advise that if the service is not part of the statutory audit itself, the fee should be accounted for under 'Legal and Professional Charges' rather than 'Audit Fees'. This distinction ensures accurate financial reporting.

Marimuthu

Marimuthu (Querist)

25 November 2023 Dear Experts,
1 A company is paying the fees to the Statutory auditor for issuing the certificate towards related party transactions entered by the company.
2 Since this transaction is not related to the statutory audit, can the company account this transaction under professional fees? Or it has to be accounted with Audit fees
3 Pls confirm

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 November 2023 It should be disclosed like this.
Payment to statutory auditor.
Audit fees.
Fees for other certification.

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RAJA P M

RAJA P M (Expert)

25 November 2023 Account the fee as LEGAL AND PROFESSIONAL CHARGES...

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Marimuthu

Marimuthu (Querist)

25 November 2023 Dear Sirs,

That is the statutory audit fees only be accounted under Audit fees.
Other fees are accounted under professional charges?

RAJA P M

RAJA P M (Expert)

25 November 2023 As per Your query the fees paid for certification charges. It's not a statutory audit. So, it will be accountable as LEGAL AND PROFESSIONAL CHARGES...

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