Audit feed chargable to members
SANTTHOSH SHETTY
(Querist) 24 October 2016
This query is : Resolved
Dear All
We have total 28 members in the society. i would like to know the amount Audit fees to be charged to members per month or per year by the Auditor as per MCS act. we are paying already Rs.35/- per month as accounting charges to accountant consultant.
Guest
(Expert) 24 October 2016
How other day to day recurring or non-recurring expenditure is being made and controlled by the society?
Kuummaar AS
(Expert) 24 October 2016
SANTTHOSH SHETTY,
YOU HAVE SAID,
"We have total 28 members in the society. i would like to know the amount Audit fees to be charged to members per month or per year by the Auditor as per MCS act. we are paying already Rs.35/- per month as accounting charges to accountant consultant."
YOUR QUERY IS FUNNY. GO THROUGH BYE LAWS/RULES AND REGULATIONS APPLICABLE TO YOUR SOCIETY AND THEN RAISE QUERY,
Guest
(Expert) 24 October 2016
Dear Shri Kumar,
Evidently, due to the academic nature of his query, he would not have been able think about the existence of byelaws of the society.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Dear PS Dingra Sir
All the other expenditures are billed and collcted by the scoeity. i have on doubt where what should be the Audit Fees to be charged by Audtior. We have separate accounting consultant for Biiling and accounting, he charges Rs.35/-per flat from us. pls guide.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Mr Kumar AS sir
How funny is my question is can you pls explain. i know there is by-laws of the society. but the amount of the Audit fees is not written in the same. hence i Asked the question. if everything to be referred then there is no use of this flatform. i need your gudance here.
Guest
(Expert) 24 October 2016
Mr. Santosh Shetty,
Your question presents quite a hypothetical scenario, as societies do run by collection on day to basis or month to month basis, except a fixed contribution for maintenance charges or subscriptions fixed by the societies.
If there is any truth in your story, instead of asking question at LCI, you could well have gone to AGM to get the issue decided by majority vote. Even if the LCI members suggest you to charge audit fee on month to month basis or in lump sum, your decision can get rescinded by majority vote of the members in the AGM.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Dear Dhingra Sir
Thank you very much for your input. In our society in the SGM, Accounting charges was decided and not the Audit Fees. Now the Maintenance bill has raised with Audit fees also, which was never discussed or takne any quotation form the Auditor. Hence i Asked the same.I think your above suggestion will help me in resolving the matter.
Kuummaar AS
(Expert) 24 October 2016
Mr. Santosh Shetty,
WHAT IS YOUR POSITION IN THE SOCIETY?
Guest
(Expert) 24 October 2016
You cannot impose any charge at your own, whatsoever position you may be holding in your society.
You may also give reply to the question of Shri AS Kumar.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Dear Kumar AS Sir and Dhingra Sir
I am just a member of the society. when i saw the bill containing the charges of Rs.35/- pm per flat for Audit Fees which is accumulating to Rs.12000/-pa only for Audit, i was surprised as i was somewhere read about the Audit Charges of 2500/- to 5000/- pa. hence i asked the question.
thank you once again.
Rajendra K Goyal
(Expert) 24 October 2016
Audit is different from accounting, can not be intermingled.
Auditor is appointed in AGM / management committee may be from panel and charges are decided.
Audit of CHS is carried as per laid down procedure and professional charges has to be collected by the society from members.
You can discuss with other nearby society.
Only qualified and panel auditor can audit the accounts and charges are increasing for each and every service.
Rs. 12,000/- does not seem to be extraordinarily inflated.
Guest
(Expert) 24 October 2016
Mr. Santthosh Shetty,
If your accumulated arrears for audit fee is Rs. 12,000/- with audit charges Rs.2500 to 5000 pa, that means you are defaulter for the last more than 28 years. I wonder, if you have asked this question after lapse of 28 years that too at LCI, not in the AGM of the society, as a member.
Moreover, how anyone can believe that the audit fee of Rs. 2500 to 5000 would have been applicable even before 28 years.
That itself reveals the query to be hypothetical academic question.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Dear sir
I.am.not a defaulter as I got 1st maintenance bill in Oct 2016. If we all 28 members will pay per month rs 35 that will accumulate to 12000 pa for audit fees which I feel extremely high as mc has not taken any quotation or passed any resolution in the meeting. Directly circulated the first bill of the soctiety. This is the newly redeveloped building society.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Dear sir
I.am.not a defaulter as I got 1st maintenance bill in Oct 2016. If we all 28 members will pay per month rs 35 that will accumulate to 12000 pa for audit fees which I feel extremely high as mc has not taken any quotation or passed any resolution in the meeting. Directly circulated the first bill of the soctiety. This is the newly redeveloped building society.
Guest
(Expert) 24 October 2016
OK, make the MC of the society answerable during AGM.
Rajendra K Goyal
(Expert) 24 October 2016
May raise the matter in AGM.
Audit fee of 12000/- is no high in these days, it is nominal.
SANTTHOSH SHETTY
(Querist) 24 October 2016
Thank you very much Dihingra sir and Goyal sir. Your input will help to resolve the matter.
Guest
(Expert) 24 October 2016
You are welcome.
H.M.Patnaik
(Expert) 25 October 2016
Normally, Audit fees is fixed based on volume of workload as well as paying capacity. Yours is a seemingly smaller society, where Audit fees can be decided based on mandays devoted for Audit. Annual audit being a one time affair in a year , it can not be treated at par with what is charged for Accounting on monthly basis. However, Institute of Chartered Accountants of India have notified the minimum audit fees that can be charged by practising C.A.firms for auditing accounts of not for profit institutions , the same may be referred to.In case the Registrar of Societies of your State have empanelled Auditors other than C.A. firms for conducting such audit, then refer to their guidelines reg. rate of Audit fees.
Rajendra K Goyal
(Expert) 25 October 2016
Managing committee can negotiate audit fee with the auditor.
