10.2 Remuneration of auditors

10.2 REMUNERATION OF AUDITORS

Determination of remuneration

The remuneration of auditors is typically determined by the company’s board of directors or the audit committee. The process of determining the remuneration may involve considering various factors such as the size and complexity of the company, the scope of the audit, the experience and expertise of the auditors, and prevailing market rates.

Shareholder approval

In many jurisdictions, the remuneration of auditors may require shareholder approval, especially if it is considered significant or if it is proposed to be paid to a related party or affiliated entity.

Basis of remuneration

The remuneration of auditors can be based on different methods:

1. Fixed fee: The auditors are paid a predetermined fixed fee for their audit services, regardless of the time and effort required.
2. Hourly rate: The auditors are remunerated based on the number of hours spent on the audit engagement, multiplied by an agreed-upon hourly rate.
3. Fee scale: Some jurisdictions may have prescribed fee scales or guidelines that provide a framework for determining auditor remuneration based on the size or complexity of the company.
4. Performance-based: In certain cases, the remuneration may include performance-based components, such as bonuses or incentives linked to the quality of the audit work or achievement of specific objectives.