Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

A proprietary audit firm of Chartered Accountant has accepted the engagement to audit the accounts of a private school with annual turnover of Rs 10 lakhs at the audit fee of Rs 8,500. The firm anticipates that the audit will consume estimated time of 2-man days of the Chartered Accountant

ANSWER
As per the notice of the 194th meeting on 2071/11/4, a CA member holding COP shall charge the audit fee to his audit client and the fee shall not be less than Rs 20,000. If the audit client is a financial institution regulated Nepal Rastra Bank or insurance company regulated the Insurance Board, the audit fee shall not be less than Rs 100,000. However, above minimum fee does not apply where the audit

client is a Government Primary School/Community School with annual turnover of less than Rs 20 lakhs. In the present case the CA member has charged the audit fee of Rs 8,500 to a private school with annual turnover of Rs 10 lakhs which would not contradict the provisions the minimum fees.



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