If we appoint a CA to Conduct TP Audit U/s. 92E of Income Tax Act, other than a CA who did it during the Last year, for a fee Less than the fee charged/paid during the Last year. Does it effects to Professional Ethichs under Undercutting of Audit fees.
2 Replies
CA SUMiT PATWARi
(Chartered Accountant)
(1441 Points)
Replied 11 October 2011
This can come under the purview of professional ethics as undercutting of fees.
However, if the engagement shows that the reduction in fees is due to reduction in quantum of work, then it cannot be said that the firm is guilty. The firm has to show that the fees was quoted low due to reduction in quantum of work (eg : there were less number of transactions during the year and such reduction in quantum of transaction is permanent in nature, etc). Some relationship has to be shown for low fees so quoted.
Aruna Kumar J
(ACCOUNT EXECUTIVE)
(40 Points)
Replied 12 October 2011
Last years Statutory Auditors XYZ & Co for a remuneration of Rs. 85000/- and TP Auditor ABC & Co for a remuneration of Rs. 75000/-.
For the Current Year Statutory Auditrs are Same XYZ & Co for a remuneration of Rs. 150000/-,. Can XYZ & Co accept the TP Audit Assignment for the Current year for a remuneration of Rs. 50000/-
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