Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
23 December 2013Friends,
In course of audit the client company usually provides lunch to auditor and auditor's representatives. Where should the expenses be booked ideally. In my present company we debit office maintenance. Your comments are invited.
Should such expenses, wherever be booked, be disclosed in PL statement as remuneration to auditors alongwith audt fees.
Regards,
Mihir
(Wealth Manager)
(5293 Points)
Replied 23 December 2013
Yes, it can be debited to sundry expenses but cannot be debited to audit fees.
Ishan Jain
(Student)
(50 Points)
Replied 23 December 2013
In my company we book it under "Staff Welfare". Lunch to auditor should be booked and claimed as expense in P&L A/C. There is no need to disclose lunch expense separately in P&L account.
Further, in my opinion you can add this to auditor's remuneration only in case you have mentioned it in Auditor's appointment letter that "such lunch expense if borne by the company will be added to auditor’s remuneration".
I hope this will help you.
Regards,
Ishan Jain
Nimish Jain
(Internal Auditor/CA final student)
(240 Points)
Replied 23 December 2013
You can debit it to General office expenses or Staff Welfare. Debiting it to Audit expenses is wrong.
CA Srikanth Yadav
(Chartered Accountant)
(3162 Points)
Replied 23 December 2013
Companies Act, 1956 very clearly specifies that all the expenses incurred by the Auditor including converyance, travelling and any other reimbursement should be included in the "Audit Fee". However, I don't know what Companies Act, 2013 says about this..........
keyur?
(accounts)
(48 Points)
Replied 23 December 2013
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26258 Points)
Replied 23 December 2013
From the heading of the post :
LUNCH FOR AUDITOR;
I was very much interested to join the Lunch being an Auditor. 
.
Similar query was raised 4 years back at caclub : /forum/details.asp?mod_id=36198&offset=1#.UrhELc7lM3Q
but unfortunately could not be solved despite a long discussion.
.
So even after the several lunch sessions; the query couldn't be solved. 
.
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26258 Points)
Replied 23 December 2013
| Originally posted by : Dipjyoti Majumdar | ||
 |
Friends, In course of audit the client company usually provides lunch to auditor and auditor's representatives. Where should the expenses be booked ideally. In my present company we debit office maintenance. Your comments are invited. Should such expenses, wherever be booked, be disclosed in PL statement as remuneration to auditors alongwith audt fees. Regards, |
 |
1. It is neither remuneration to the auditors nor the reimbursement (auditors have not paid at all hence there is no question of reimbursement).
2. "Lunch would be provided free of cost" is never expressed in the Auditors' Engagement Letter ( Even in engagement ceremony; nobody informs/writes that you would be provided free refreshment/lunch - it is already well understood that this will be there). 
3. The lunch expenses would be debited to the OFFICE ADMINISTRATION because auditing is a part of ADMINISTRATION.
However; if MESS EXPENSES head is already there (due to such facility being provided to other employees); then the same Head would be debited.
.
CA KARAN MAINI
(Practising CA)
(106 Points)
Replied 23 December 2013
rocky
(cA)
(193 Points)
Replied 23 December 2013
let the auditor have lunch ...we will decide at year end..
Dhruvi N suthar
(Account Executive)
(303 Points)
Replied 24 December 2013
Lunch Exepense of Auditor not debited to Profit & loss Account at all.
It might be debited to Staff Welfare Exp Or Office Administaration Exp Or Misc Expense....
Staff welfare exp because Auditor is also the part of the organisation whther internal or statutory..
Office Administarion & Mis is a General Head for these kind of Expenses...
But as per my opinon Staff Welfare would be better Head to charge Auditors Lunch because directly or indirectly organisation incurred exp on staff & ultimately it will affect the productivity of the organisation....
Vikas Jain
(Student)
(80 Points)
Replied 24 December 2013
devendragarikapati
(ca-final )
(112 Points)
Replied 24 December 2013
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