# Remuneration of Auditor — Section 142

## Who Decides Remuneration

The remuneration of the auditor of a company shall be fixed in its general meeting or in such manner as may be determined therein.
For first auditor appointed by the Board (under Section 139(6)), remuneration may be fixed by the Board.
For subsequent auditors, remuneration is fixed by the shareholders in the General Meeting.

## What is Included in Remuneration

The remuneration of the auditor of a company shall include:

1. Fee payable to the auditor.

2. Expenses, if any, incurred by the auditor in connection with the audit of the company.

3. Any facility extended to him.

## What is Excluded

Remuneration shall NOT include:

Any remuneration paid to the auditor for any other service rendered by him at the request of the company (e.g., taxation services, certification work etc. — these are billed separately).

Worked example

### Example 1

Example 1: ABC Ltd. paid its statutory auditor: ₹2,00,000 as audit fee, ₹20,000 reimbursement of travel for audit, ₹15,000 for tax filing assistance. What is the 'remuneration' for purposes of Section 142?

Answer: ₹2,00,000 (fee) + ₹20,000 (audit-related expenses) = ₹2,20,000. The ₹15,000 for tax filing is for separate services and is excluded from 'remuneration' under Section 142.

⚠️ Common exam mistakes

Including fees for other professional services (tax, advisory, certification) in the disclosed 'auditor's remuneration'.
Forgetting that the Board can fix remuneration of the FIRST auditor — only subsequent auditors require shareholder approval.
Excluding expenses reimbursed by the company from the definition — these are specifically INCLUDED.

Bare-Act text Section 142 · Companies Act, 2013 · click to expand

Section 142(1): The remuneration of the auditor of a company shall be fixed in its general meeting or in such manner as may be determined therein: Provided that the Board may fix remuneration of the first auditor appointed by it. Section 142(2): The remuneration under sub-section (1) shall, in addition to the fee payable to an auditor, include the expenses, if any, incurred by the auditor in connection with the audit of the company and any facility extended to him but does not include any remuneration paid to him for any other service rendered by him at the request of the company.

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Remuneration of Auditor (Section 142)

Worked example

⚠️ Common exam mistakes