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accepting the assignment.
Answer Part I -- Relevant Laws
▪ Council General Guidelines 2008 - Appointment as Statutory Auditor
Part II -- Requirements of Relevant Laws
➢ A member of the Institute in practice shall not accepts the appointment as a statutory auditor of a
PSUs’/Govt company(ies)/Listed company(ies) and other public company(ies) having a turnover of
` 50 crores or more in a year and where he accepts any other work(s) or assignment(s) or service(s)
in regard to same undertaking(s) on a remuneration which in total exceeds the fee payable for
carrying out the statutory audit of the same undertaking.

For this purpose, the other work/services include Management Consultancy and all other
professional services permitted by Council excluding audit under any other statute, Certification
work required to be done by the statutory auditor and any representation before an authority.
Part III – Case Discussion
➢ In the given case, A auditor of Z Ltd having turnover INR 200 crore fixed audit fees at INR 50 Lakhs.
During the year, the company offers A an assignment of management consultancy within the
meaning of Section 2(2)(iv) of the CA Act, 1949 for a remuneration of ₹ 1 crore
Part IV – Conclusion
➢ In view of the above position, it would be a misconduct on A’s part if he accepts the
management consultancy assignment for a fee of ` 1 crore.

QNO Councile General Guideline 2008--Minimum Fees Old Course-- (N05E, M09R, M09E, N15E, PM17,
774.000 TITANIUM CNO – PE.1760 M19M)
M/s LMN, a firm of Chartered Accountants having 5 partners accepts an audit assignment of a newly

formed private limited company for audit fees of ₹ 5,000.
Answer Part I -- Relevant Laws
▪ Council General Guidelines 2008 - Minimum Audit Fee in respect of Audit
▪ (Repealed Now)
Part II -- Requirements of Relevant Laws
➢ This chapter of Council General Guidelines 2008is repealed from 8th June 2011. So, there is no
minimum or maximum audit fees.

Recommendatory fees are generally given every year at the end in Guidance Note on Tax
Audit. However, such prescribed minimum audit fee is recommendatory, not mandatory in
nature.

Part III – Case Discussion
➢ M/s LMN, a firm of Chartered Accountants have 5 partners and have accepted an audit assignment
of a newly formed private limited company for audit fees of Rs 5,000.

Part IV – Conclusion
➢ So as per the above acceptance of audit assignment by M/s LMN, a firm of Chartered Accountants
for audit fees of Rs 5,000 is not violation of any provisions.

No of partner in the firm for determination of fees is of no relevance as the relevant Chapter XII
of Council General Guidelines 2008 which talks about the minimum audit fee in respect of Audit
has been repealed.

Therefore M/s LMN will not be held liable for guilty of misconduct.

QNO Council General Guideline 2008--Tax Audit Limit Old Course-- (SM17)
774.010 TITANIUM CNO – PE.1760
A member of the institute shall not accept in a year more than the specified number of tax audits under
section 44AB of the Income Tax Act.
Mr. Gaurav is a partner in M/s. XYZ & Co., a firm of Chartered Accountants with 6 partners. During the
assessment year 2015-16, Mr. Gaurav alone had signed 290 tax audit reports consisting of both
corporate and non-corporate assesses.
Answer Part I -- Relevant Laws

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