CAs to disclosure Fees-Relative size of audit client to ICAI w.e.f. 01.10.2023
Disclosure of Fees-Relative size is to be made by a Chartered Accountant to ICAI w.e.f. 01.10.2023 as per reporting requirements pertaining to Fees related disclosure under the revised requirements in Code of Ethics
ICAI has made the provisions pertaining to “Fees – Relative Size” as contained in Code of Ethics applicable from 1.10.2022 with certain amendments.
Under the revised provisions of “Fees-Relative size”, disclosure is required to be made to the Institute in case where the gross annual professional fees from an Audit client exceeds the prescribed threshold percentage for two consecutive years.
A tabular presentation of the provisions are as under:
| Audit Clients that are not Public Interest Entities | Audit clients that are Public Interest Entities |
|
Where an audit client is not a public interest entity and for two consecutive years, the total gross annual professional fees (“total fees”) from the client and its related entities represent more than 40% of the total fees received by the firm expressing the opinion on the financial statements of the client, the firm shall: Disclose to the Institute the fact that for two consecutive years, the total of such fees represents more than 40% of the total fees received by the firm. Provided that no such ceiling on the total fees of the firm shall be applicable where total fees of the firm does not exceed twenty lakhs of rupees in respect of a firm including fees received by the firm for other services rendered through the medium of a different firm or firms in which such member or firm may be a partner or proprietor. Provided further that no such ceiling on the total fees of a firm would be applicable in the case of audit of government Companies, public undertakings, nationalised banks, public financial institutions or where appointments of auditors are made by the Government or Regulators. If the fees continue to exceed 40% after two years, the firm shall each year disclose to the Institute the matters prescribed |
Where an audit client is a public interest entity and for two consecutive years, the total gross annual professional fees (“total fees”) from the client and its related entities represent more than 20% of the total fees received by the firm expressing the opinion on the financial statements of the client, the firm shall disclose to the Institute the fact that for two consecutive years, the total of such fees represents more than 20% of the total fees received by the firm. Provided that no such ceiling on the total fees of the firm would be applicable where total fees of the firm does not exceed twenty lakhs of rupees in respect of a firm including fees received by the firm for other services rendered through the medium of a different firm or firms in which such member or firm may be a partner or proprietor. Provided further that no such ceiling on the total fees of a firm would be applicable in the case of audit of government Companies, public undertakings, nationalised banks, public financial institutions or where appointments of auditors are made by the Government or Regulators. If the fees continue to exceed 20%, after two years, the firm shall each year disclose to the Institute the prescribed matters |
In accordance with the provisions of revised paragraphs R410.3a and R410.4 of Volume-I of Code of Ethics, where the Fees related disclosure is to be made to the Institute, the CA firm shall make the disclosure in the prescribed form duly filled and signed. The form will be sent to Ethical Standards Board via email by CA Firm.
Can a demand notice be issued u/s 156 for non-payment of Dividend tax u/s 115-O, when as per assessment order…
The issue already examined and adjudicated by the quasi-judicial authority, i.e., CIT(Appeals), cannot be reopened on the same set of…
One TDS is deducted, credit has to follow, failure of deductor to deposit the amount to the credit of the…
Merely because assessee did not explain purpose of cash withdrawal from bank, it can not be taxed u/s 69C as…
In GST Notice u/s 74, allegations should emanate from itself, a bland statement of ‘fraud or concealment of facts” not…
For claiming deduction u/s 57(iii) a reasonable and intelligible nexus should be established between the expenditure incurred and the income…