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Audit fee

hardik dave (student) (508 Points)

13 January 2011

can anybody tell me in profit or loss prior to incorporation, audit fee expenses is taken in which period?

In pre incorporation or post incorporation period with reason.

reply soon.

thanks in advance

Hardik Dave

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12 Replies

Dheeraj (Learner) (1100 Points)
Replied 13 January 2011

i think its post incorporation, because the audit is done afterwords...

plz wait for the seniors reply...

hardik dave (student) (508 Points)
Replied 13 January 2011

auditors do audit of pre and post period whether they are appointed after incorporation of company. so i think it will be distributed to both period.

hardik dave (student) (508 Points)
Replied 13 January 2011

thank u dheeraj for ur rply

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 13 January 2011

In my view,should be divided in time ratio.... as audit is always conducted for full period.

if auditor appointed conducts audit for post incorporation period only ...then it would be post incorporation only

Regards

Madhusudan

CA MAULIK (C.A) (937 Points)
Replied 13 January 2011

I think divide it in the time ratio

CA CS Preeti Mehta (nil) (635 Points)
Replied 13 January 2011

Originally posted by : Madhusudan Kabra
	In my view,should be divided in time ratio.... as audit is always conducted for full period. if auditor appointed conducts audit for post incorporation period only ...then it would be post incorporation only Regards Madhusudan

(Guest)

AUDIT is to be taken to post incorporation... the pre audit u are talking about is descretionary and there is no substantial work effortsdone in that....... !!!

audit reports are always for the post periods

i had myself audited leela kempinski.. wherin we didnt deal much with the pre incorporation expenses....

and even if we did vouch or interrogate the preincorp.... expenses .. dont forget that it was becauz of the audit of post incorporation period !!!

Nishit (CA) (26 Points)
Replied 14 January 2011

Total audit fees should be shown in post incorporation period on the logic that audit becomes compulsory only after incorporation of the company , But as accounts of whole year including pre incorporation period will be audited , it should be allocated in TIME RATIO .

Bhav Bhuti Sharma (Towards Professionalism ) (823 Points)
Replied 14 January 2011

All fixed charges like salaries, rent, audit fees, insurance, depreciation, administrative expenses will divide on the basis of time ratio. All expenses which done after incorporation will be charged totally to after

incorporation. so it depends on the nature of expenses .

if audit fees is for whole f.y must divide in time ratio vice versa in post incorporation period .