Mystery of Zero Audit Fees of 1.81 lacs Companies As per NFRA Report

The answer is Big No?

In No way It is possible to get Audit done work done without paying any single rupee for Audit!! Does any logic certify that?

So How NFRA computed that –  Wherefrom they have taken this data?

NFRA has taken the data of Auditors fee from the *Payment to Auditor section* in *AOC-4* filed by the Company.

Now, due to clerical mistakes, Many times Auditors fees are either mentioned in the *Other Expenses Column or Finance Cost*.

Zero Audit Fees

This is either due to clerical mistake by Articles /staff of CA or and since also Company Secretary authorized to fill-up the form these may not be cross-checked by Auditor who audited the company.

Argument -2

If Auditors fees are not clubbed in Other Expenses or Finance cost but Actuality it is Zero *then Why the Auditors fees in very next upper Slab I.e 1000 is as low as 0.20% of Total I.e 817 in comparison to 30% in Nil Audit fee slab*

*It is evident that the Zero fee slab is a Clerical mistake in AOC-4 form which is clubbed with Other Expenses or Finance Cost*

Argument -3

NFRA should have cross-checked the data with ICAI before relying on the faulty report and concluding any remark on it.

If not then at least asked on a sample basis at least 50% of the Auditor that whether they have audited at Zero cost or is it because of clerical mistake!!!

Hence it is evident that due to clerical mistakes in the AOC-4 form, NFRA published wrong data and wrongly concluded on Auditors role in Companies. And it also implies that self-prepared data are always misleading unless it is audited by some independent person who is an expert. Had this NFRA data would have verified by ICAI or CA members, Half of the problem would have been solved.

Would request NFRA to revisit the data on which they have relied and based their opinion.

Author Bio

Qualification: CA in Practice
Company: MD ASIF & ASSOCIATES
Location: Kolkata, West Bengal, India
Member Since: 27 Jun 2020 | Total Posts: 3
CA Asif Ali, has experience of over 12years in Accounts and Taxation Industry. Deals mostly in Indirect Tax, GST, Income Tax and Company Law Matters. Especially related to Foreign, NRI Taxation and NGOs. View Full Profile

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3 Comments

  1. Rajendra Bandyopadhyay says:

    If it is a mistake of CA or, their article staff, no such mistake should happen from next financial year. We should be thankful to NFRA for disclosing the wrong

  2. Nand Kishore says:

    The main contention of the NFRA is that the quality of audits is not up to the mark and are a mere sham. Arguements in your write-up clearly show that the Audits are not being conducted in a professional manner. “This is either due to clerical mistake by Articles /staff of CA or and since also Company Secretary authorized to fill-up the form these may not be cross-checked by Auditor who audited the company”.

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