Accrued Audit Fees Journal Entry

Audit Fees Payable / Outstanding Journal Entry

When a company conducts an audit from a chartered firm to verify Books of Accounts and Financial Statements and also to identify any mistake, error and fraud, then that firm receives a fees known  as "Audit Fees" from the company. But, for instance, if the Audit fees is not paid to the audit firm for the current audit done by chartered firm, then it is called Accrued Audit Fees / Outstanding Audit Fees or Audit Fees Payable for the company which is payable by it to audit firm for the current accounting period.

The company records the following Accrued Audit Fees Journal Entry in the books of accounts:

                Audit Fees Expense Account  XXX

                                                              Accrued Audit Fees Account  XXX

                                          (Audit Fees Accrued for the Current Period)

At the end of accounting period, if the company actually paid audit fees to audit firm, then the Entry is shown below:

                               Audit Fees Expense Account  XXX

                                                                              Cash Account  XXX

                                                    (Paid Audit Fees For Cash)

Accrued Audit Fees is a Current Liability and it is an example of Accrued Expenses, so it is shown on the Liabilities & Equity side of Balance Sheet.