Chapter X - Audit and Auditors
Section 142
Section 142: remuneration of auditors
The auditor’s remuneration is fixed in general meeting, or in the manner determined there. The Board may fix the remuneration of a first auditor it appoints.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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. (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.
Introduction
Section 142 keeps control of audit remuneration with the members, with one exception for a first auditor appointed by the Board. The statutory remuneration includes the audit fee, audit expenses and facilities, but not payment for other services the company requests.
Key takeaways
Members decide
Remuneration is fixed in general meeting, or in the manner determined there.
First auditor
The Board may fix the remuneration of the first auditor it appoints.
What counts
Remuneration includes the fee, audit expenses and facilities, but excludes pay for other services requested by the company.
Who fixes the remuneration
Sub-section (1) requires the remuneration to be fixed in general meeting, or in a manner determined in that meeting, for example by authorising the Board within limits. Under the proviso, the Board may fix the remuneration of a first auditor it appoints.
What the remuneration includes
Under sub-section (2), the remuneration includes the audit fee, any expenses the auditor incurs in connection with the audit, and any facility extended to the auditor. Payment for other services rendered at the company’s request is not part of it. Those services must also be permitted under section 144.
Practical preparation
Draft the general meeting resolution to fix the remuneration or set out how it will be fixed. Record the Board resolution for a first auditor. Account separately for audit fee, expenses and facilities. Get Board or audit committee approval for permitted other services and keep that pay separate.
Practical checklist
Do
- State clearly in the general meeting resolution how the remuneration is fixed.
- Account for fees for other services separately.
Avoid
- Do not let the Board fix remuneration beyond what the general meeting authorised, except for a first auditor it appointed.
- Do not treat fees for prohibited services as permissible just because they are kept separate.
Illustrative example
Hypothetical: AGM authority to the Board
At the AGM, members authorise the Board to fix the auditor’s remuneration for the year.
Resolve
The AGM resolution sets out how the remuneration is to be fixed.
Fix
The Board fixes the fee and expenses within that authority.
Separate
Fees for any permitted other services are approved and recorded separately.
Outcome
- The remuneration is fixed in the manner determined by the general meeting, as section 142(1) requires.
Glossary
- First auditor
- The company’s first auditor; where the Board appoints it, the Board may fix its remuneration.
- Facility
- Any facility extended to the auditor, which section 142(2) counts as remuneration.
Frequently asked questions
Can the Board fix the statutory auditor’s fee?
For a first auditor it appointed, yes. Otherwise the fee is fixed in general meeting or in the manner determined there.
Are the auditor’s travel expenses part of remuneration?
Yes. Expenses incurred in connection with the audit are included under section 142(2).
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026