Auditor Remuneration explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A short disclosure with a specific structure — and one that reveals, in five lines, how much of the audit firm's fee has nothing to do with the audit.
The five sub-heads of auditor remuneration
Payments covered here should be for payments made to the firm of auditor(s). Expenses incurred towards such auditor's remuneration should be disclosed under each of:
- Auditor;
- For taxation matters;
- For company law matters;
- For other services;
- For reimbursement of expenses.
The scope is payments made to the firm of auditor(s) — not payments for the statutory audit alone. That is why four of the five sub-heads cover things other than auditing.
The structure lets a reader compute, directly from the note, the ratio of non-audit fees to audit fees paid to the same firm. That ratio is a standard input into any assessment of auditor independence, and the disclosure exists to make it computable without asking the company.
Reimbursement of expenses is deliberately separated from the four fee categories, since out-of-pocket recoveries are not remuneration for services and would distort the ratio if bundled into any of them.
Where auditor remuneration sits in Note 7
Note 7 of the General Instructions requires disclosure by way of notes of additional information regarding aggregate expenditure and income on specified items. Auditor remuneration is clause (i) of that list, which also carries:
| Clause | Item |
|---|---|
| (a) | Employee benefits expense — salaries and wages; contribution to provident and other funds; share-based payments to employees; staff welfare expenses |
| (c) | Any item of income or expenditure exceeding one percent of revenue from operations or Rs. 10,00,000, whichever is higher |
| (g) | Net gain or loss on sale of investments |
| (h) | Net gain or loss on foreign currency translation, other than that considered as finance cost |
| (i) | Payments to the auditor |
| (j), (m) | Corporate social responsibility disclosures |
Net gain or loss on sale of investments
Ind AS Schedule III does not provide a distinction in presenting realised and unrealised gains or losses on fair value changes. The resolution: an entity shall present "net gain or loss on sale of investments" separately by way of a note below the table on "Net gains (losses) on fair value changes".
So the realised element is disclosed as a footnote to the fair value changes table rather than as a separate line within it — the same footnote referenced in the other income presentation.
Employee benefits in the notes
Clause (a) repeats, as a note disclosure, the four-way split already required on the expense side: salaries and wages, contribution to provident and other funds, share-based payments to employees, and staff welfare expenses. The face carries the aggregate; the note carries the composition.
Common mistakes
- Disclosing only the statutory audit fee.
- Including reimbursements within fees for services.
- Aggregating taxation and company law work into "other services".
- Reporting auditor remuneration paid to individual partners rather than to the firm.