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ICAI questioned on `non-audit work' ambit

Our Bureau

NEW DELHI, Aug. 29

THE Department of Company Affairs (DCA) today questioned the move of the Institute of Chartered Accountants of India (ICAI) to keep certain services such as "tax work" outside the ambit of its recent regulation barring auditors from accepting non-audit fees in excess of audit fees from the same client.

"ICAI has placed a cap on the non-audit fees that an auditor can receive from a client for whom a member of the institute has performed statutory audit work. This has been done to ensure independence of the auditor. But at the same time, it has excluded certain areas such as tax work from the definition of non-audit work. This makes us think as to whether the cap is really a truthful cap," the DCA Secretary, Mr Vinod Dhall, said here.

ICAI had on March 8 notified that a practising member of the institute will be deemed to be guilty of professional misconduct if he accepts the appointment as a statutory auditor of a PSU/Government company/listed company and other public companies having a turnover of more than Rs 50 crore in a year and accepts any "other work" or "assignment" or "services" to the same undertaking on a remuneration which exceeds the fee payable for carrying out the statutory audit of the same undertaking.

It had also specifically mentioned that the term "other work" or "assignment" or "services" would include management consultancy, and all other professional services permitted by the Chartered Accountants Act, but would not include audit under any other statutes; certification work required to be done by the statutory auditors and representation before any other authority.

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