A public company had appointed an Auditing Firm as Internal Auditors. The said auditors are submitting their internal audit report to the company / board every quarter. The internal auditors are paid the fixed fees for their report.
The company use to invite regularly the Internal Auditors for attending the Audit Committee Meetings. They also use to attend such meetings. Recently the internal auditors have informed the company that for attending the "Audit Committee Meetings" or "Board Meetings" they have to be paid sitting fees like directors.
Is there any provision in the company law to pay such fees. Is there any guidance note issued by the CA Institute for payment of such fees to the Internal Auditors. what are the solutions available to the company for paying or denying such fees to the internal auditors.
10 January 2011
The Company is under no Statutory obligation to pay sitting fees to the Internal Auditor for attending the Audit Committee meetings of the Company.
Internal Auditors are merely invitees to the Audit Committee Meetings of the Company and at times the members of the Audit Committee may also meet without the presence of CFO, Head of Internal Auditor and representative of Statutory Audior. they are merely invitees and are not entitled to vote at the meeting.
CAclubindia
