RECOVERY OF OUTSTANDING AUDIT FEES

This query is : Resolved

vivek Gopalakrishnan (Querist)
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14 July 2010
Can anyone please clarify whether a RETIRING AUDITOR has the privilege to issue a Legal Notice to a Client for non payment of outsanding Audit Fees duly being reflected in Balance Sheet??

If Not what is the alternate mode of Recovery?

Vivek Gopalakrishnan
CA Final Stdent.

Ankur Garg

Ankur Garg (Expert)
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14 July 2010 AS PER MY GENERAL UNDERSTANDING YES A RETIRING AUDITOR CAN GO AHEAD AND FILE A LEGAL CLAIM FOR HIS/HER LEGITIMATE FEE.

PROVIDED NOTHING IS PENDING FROM THE AUDITOR'S SIDE TOWARDS THE COMPANY.

WAIT FOR OTHER EXPERT OPINION.

REGARDS

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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20 July 2025 Good question! Here’s a clear explanation about whether a retiring auditor can issue a legal notice for outstanding audit fees and alternative recovery methods:

1. Can a retiring auditor issue a legal notice for outstanding audit fees?
Generally, NO.
Once an auditor retires (either by rotation, resignation, or completion of tenure), they cease to be the auditor of the company.
Since they are no longer the appointed auditor, their authority to act on behalf of the company or take legal action related to the audit engagement ends.
However, the retiring auditor can pursue recovery of their professional fees as a civil matter in their own name, but not as the company’s representative.
2. What is the usual procedure for recovering outstanding audit fees?
Before retirement:
The auditor can request payment from the company.
If payment is not made, the auditor can send reminders or notices as part of professional practice.
After retirement:
The auditor should issue a legal notice in their own name for recovery of fees.
If fees remain unpaid, the auditor can file a civil suit in the appropriate court to recover the amount as a professional debt.

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