Dear colleagues,
Banks are offering concurrent audits with paltry fees. The latest in the fray is UCO bank which offers Rs.9000/- as fee for a branch with advance upto150 crores. Most of the branches will fall under this catagory. (Thank god!, they have improved a little! Earlier they used to offer 5000/-). Most of them stipulate minimum 8 days attendance of CA's and 20 days attendance of audit assistants. And we have to give monthly, quarterly and half yearly audit reports also that too in very extensive formats running into pages.
If we calculate the cost of audit, the volume of risk we undertake as well as the value the banks get out of it, these audits are not viable at the fees they offer. It will not suffice to meet even our conveyance and stationery cost!
We all are facing the problem of shortage of good staff, rising salaries, stipend and other operational cost and the rising expectation of the auditees, in every area. If the bank appoints their on staff for a concurrent audit, the cost to the bank will be nothing less than 50,000/- per month. But when it comes to appointing us, they offer disgustingly low fees like Rs. 7000/- to Rs. 9,000/-. At the same time, they accuse us of low quality of audits. How strange? Quality entails a cost. Banks should be willing to pay more for better quality.
Concurrent audits are a major source of work for freshers and Small & Medium firms. ICAI should take a stern stand regarding the fee. ICAI should also insist that the concurrent audits should be given to freshers or Small & Medium firms with a standing of less than x number of years.
And, we also have to take a stern stand. We should not accept these kind of audits which pay us peanuts. Let us stand straight and tell these banks that we are not beggers and we WANT reasonable fee. Else, we don't do the audit.
Another important information for the members: Many banks are asking concurrent auditors to do the limited review of their quarterly accounts. As per the council decision, a concurrent auditor is not permitted to do the limited review and if he does, it will be treated as a professional misconduct.
Your valueable comments are welcome
James Antony FCA
www.financeandtax.blogspot.com
CAclubindia
