Under section 492 the remuneration of the auditors
is fixed by the person/persons appointment. If this is the company in general
meeting the company AGM agendas might include something like:
is fixed by the person/persons appointment. If this is the company in general
meeting the company AGM agendas might include something like:
To re-appoint the auditors Fussy α Co.
as the company’s auditors until the
as the company’s auditors until the
conclusion of the next AGM of the company,
and to authorize the board to fix the auditors’ remuneration.
You will notice that the independence of the auditors
is made by an appointment by the members in general meeting. If you refer back
to chapter1 on agency theory you may think that the auditors’ independence is
then compromised by the delegation of the fixing of their remuneration to the
directors. This is one of the reasons why auditors must not only be
independence of their client, but must be seen to be independent and not
influenced by the size of any fees.
is made by an appointment by the members in general meeting. If you refer back
to chapter1 on agency theory you may think that the auditors’ independence is
then compromised by the delegation of the fixing of their remuneration to the
directors. This is one of the reasons why auditors must not only be
independence of their client, but must be seen to be independent and not
influenced by the size of any fees.
Section 493 requires that the remuneration of the
auditors shall be stated in a note in the company’s accounts.
auditors shall be stated in a note in the company’s accounts.
Disclosure in the accounts must be made of all
amounts (including benefits in kind) paid to the auditor for both audit and
non-audit work (preparing accounts, tax, consultancy etc.) inclusion must be
made of the remuneration from non-audit work paid to associates of the audit
firm (e.g. management consultancy firms which are connected with the auditors)
and for work done for subsidiaries of the client. The auditors must supply the
necessary information to the company.
amounts (including benefits in kind) paid to the auditor for both audit and
non-audit work (preparing accounts, tax, consultancy etc.) inclusion must be
made of the remuneration from non-audit work paid to associates of the audit
firm (e.g. management consultancy firms which are connected with the auditors)
and for work done for subsidiaries of the client. The auditors must supply the
necessary information to the company.
Thus auditor’s remuneration must be disclosed to
members and other users of the accounts and cannot be hidden by including it in
a global figure such as administration expenses. Look it up every time you see
a copy of a company’s annual report and accounts.
members and other users of the accounts and cannot be hidden by including it in
a global figure such as administration expenses. Look it up every time you see
a copy of a company’s annual report and accounts.