Accept audit for lesser fee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2013 Can a person accept an audit for a lesser fee than the previous auditor? will the answer be same if the audit is internal audit?Will it gets attract any professional misconduct?

Ajay Mishra

Ajay Mishra (Expert)
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10 October 2013 A Chartered Accountant in practice CANNOT:
• Use any designation other than Chartered Accountant on professional documents, visiting cards, letterheads or signboard. The Council has decided that a member of the institute shall not be permitted to use initials "CPA" (standing for Certified Public Accountant) on his visiting card.
• Charge fees on a percentage of profits or which are contingent upon the findings, or results of such work provided that.
a. In the case of a receiver or a liquidator, the fees may be based on a percentage of the realisation or disbursement of the assets.
b. In the case of an auditor of a co-operative society the fees may be based on a percentage of the paid-up capital or the working capital etc.
c. In the case of a valuer for the purposes of direct taxes and duties, the fees may be based on a percentage of the value of the property valued.
• Engage in any business other than the profession of chartered accountants unless permitted by the Council.
• Accept position as auditor previously held by another chartered accountant without first communicating with him in writing.
• Accept any other work/assignment/service on a remuneration, which exceeds the fees payable for statutory audit of the same undertaking. (Applicable only in respect of statutory audits of public sector undertaking/Govt. Companies/Listed companies/other public companies with turnover of Rs. 50 crores or more in a year for appointments after 1st April, 2002 — Ref: Notification No. 1-CA(7)/60/2002 published in CA Journal-March, ’02 issue).
• Accept or carry out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:— (notification No.1-CA(7)/93/2006 published in CA journal on page 652 of October, ’06 issue):

Nikhil Kaushik

Nikhil Kaushik (Expert)
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10 October 2013 you may accept fees which is less than what was charged by the previous auditor. However, it should not be less than the minimum fees prescribed by the ICAI.

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