Stat Audit Staff accommodation expenses

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Marimuthu (Querist)
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22 March 2024 Dear Experts,
1 The Stautory audit firm's staff staying in the hotel.
2 The company is remitting the amount to the hotel for their accomodations
3 The hotel raised the invoice in the name of the company.
4 Now how the company can account this expenses under which group?
5 What would be the ledger name for this transactions.

RAJA P M

RAJA P M (Expert)
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22 March 2024 You can account the expense in Your previous ledger (if any) like 1.Hotel and Accommodation charges, or 2. Business Promotion or 3. General Expenses or 4.any other hotel, food, conveyance ledgers. But, give suitable narration for the said expenses.

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Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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15 August 2025 1. Ledger Treatment:
Booking under “Hotel & Accommodation Charges” is most appropriate. Alternatively, if your accounting structure allows, you may use “Audit Facilitation Expenses,” “Professional Support Costs,” or connect it to a Client Service Cost Center for better cost tracking.
2. GST & Tax Perspective:
If the invoice shows GST and your firm is registered, you may claim ITC on the tax portion (except on disallowed items). Confirm that the service classification and your GST status allow it.
3. Sample Accounting Entry:
Debit Hotel & Accommodation Charges (or Audit Facilitation) ₹XX,XXX
Credit Bank / Cash ₹XX,XXX
Narration: "Statutory audit staff accommodation per hotel invoice dated DD/MM/YYYY."
4. Disclosure Suggestion:
In your financial statements, consider including a note under Administrative or Professional Expenses:
“Includes accommodation costs for statutory audit staff during audit period.”
5. Internal Policy Tip:
Consider establishing a pre-approval protocol or voucher system when soliciting client support for audit logistics, to ensure policy alignment and expense control.

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