Repeal of "minimum audit fees"

Many of them still have lingering doubts about the minimum fee to be charged for an audit. In this post I would like to share something about this topic.

Upto 7th june 2011 there was minimum fee slabs to be charged for an audit, based on population of area and the number of members practising in a firm. (for details see Council Guidelines No.1-CA(7)/02/2008, dated 8^th  August,2008-para 12)

But  as per the 306^th council meeting held on 7^th- 8^th june 2011(announcement no.ICAI/ESB/2011/ 01 dated 29/07/2011), a decision was taken that the minimum fee to be charged for an audit be repealed .

Hence from 7^th june 2011 the rules for minimum audit  fees stands repealed.

                The fees to be charged can be decided as per the agreement between the auditor and the company.However care should be taken that the fees from management consultancy services(eg-preparation of cash fow statement,working capital management ,energy audit,environmental audit etc) as fixed by the manangement  should be lesser than or equal to the audit fees fixed by the shareholders.(This is to ensure  as the auditor may put more dependence on the management and may lose his independence)