What is a difference between chargeable and nonchargeable hours?The plain and simple difference is that if can bill the hours to the client then it is chargeable. If it isn't chargeable then you CANNOT bill the client for that task or activity.
What is the general rule with billing hours?
The general rule is that if it is time spent to benefit the client either directly or indirectly, it is chargeable. For example, researching accounting pronouncements for the Director of Accounting would be considered chargeable to the client. Coaching lunch with your coach or mentor would not be chargeable to the client. Without a doubt there may be some activities could be viewed as being in either buckets. If that were to happen, my advice would be to follow your company's policy.
This leads us to the question, what should an auditor do with uncharged time?
If the time is not chargeable, in most cases you should be able to put it into the "general & administrative" category. Now this could be labeled differently depending on your firm's preference. For example, it could be labeled "G&A" this would basically still mean general & administrative. This has always been the catch all default.
The important thing to note is that, uncharged time does not mean "eating hours".
Eating hours is a concept in the Big 4 that is largely prohibited and frowned upon. Basically, let's say you worked 14 hours at the client, but you only charged 12 hours. If you are to use Big 4 terminology, the two hours you "ate". The reason why it is not advisable to "eat hours", which is completely different from uncharged hours, is because it affects budgets.
Next year's audit will be based on this year's budget. If this year you say cash confirmations took you 5 hours, but in actuality took 7 hours, next year the new associate may only have 5 hours to do 7 hours of work! Furthermore, your client needs to be charged for the hours you spent!