REV. DRAFT MEMORANDUM TO ICAI ON CUT THROAT BIDDING & PROFESSIONAL DEVELOPMENT

FACTS:
1) A CA QUOTED RS. 174 / GRAM PANCHAYAT FOR PANCHAYAT AUDIT FOR HOOGLY & ANOTHER CA QUOTED RS 224 FOR COACH BIHAR,WB.
2) ANOTHER CA QUOTED 23% OF AUDIT FEES IN C.Y. TO LAST YEAR FEES TO SECURE WORK OF HUDCO.

MEASURES EXPECTED FROM ICAI:

1) RE-ESTABLISH EMPANELMENT SYSTEM : We request to re-establish system of Empanelment by RBI by widening its scope i.e. for All type of Bank Audit, whether concurrent, Staturary, revenue. A copy of Report should also be submitted directly to RBI. Everyone knows benefit of appointment by Independent body. Now, everyone know, how firms are appointed by adopting unethical means. Previously, system of Empanelment was there in Bank audit & appointment by RBI was there. Why such system was scrapped?If any deficiency in system was there, than such system should have been refined instead of scrapping.
If RBI is not ready to take the responsibility of appointment than ICAI should establish a " independent cell of its staffs"' for appointment

2) CHANGE TENDERING SYSTEM: We CAs will not gain with such tender system. Even panwala, autowala, rickshaw wala, all fixes minimum price in a remote village. Change in system is also needed apart from awareness among CAs. I will request to impress upon ministry and authorities to have a base quotation price keeping in view of work load."Base quotation price" is the price below which no one can quote.
3) PROFESSIONAL MISCONDUCT : Securing or quoting fees below heighest of last 3 years fees should be part of professional misconduct. However, in cast of 1st year of audit, basis should be Total cost + reasonable profit.

4) CITYWISE/ STATEWISE TASK FORCE TO MONITOR: We request ICAI head office to form a "big task force" consisting of staffs of ICAI to monitor on issue.

5) CREATE AWARENESS To create social pressure on cut throat bidders, we request to email to each members the regulation for maintainance of cost sheet & consequences for its violations.

6) AUDIT OF GOVT. SPRNDING: If we could impress upon authorities, the benefits of (a)audit of each rupee of govt. and
(b)maintainance of a/c in double entry system, we will be getting a large volume of work and cut throat bidding will be automatically curbed.

7)RE-NEGOTIATE WITH MINISTRY, CAG, RBI AND OTHER AUTHORITES:Taking into account the skill and time required to perform work & inflation, we request ICAI to re-negotiate fees with authorities.

8) SUO MOTO ACTION : We request ICAI head office to direct regional councils, branches, study circles, chapters, other bidders at tenders to complain to ICAI, Head office and also request ICAI, Head office to take suo moto action against cut throat bidders.

9)AGE LIMIT OF 50 YEARS FOR ENTERING INTO PRACTICE: Like advocate, there should be age limit for entering into practice. It should be 50 years FOR TAKING NEW CP.

10) ESTABLISH A SYSTEM OF EMPANELMENT FOR COMPANIES ALSO: A system of empanelment for appointment of auditor of Companies, whether Private Ltd or public Ltd, should also be established. Appointment of auditor by an "Independent Body will further leads to independence of auditor.

11) ESTABLISH A SYSTEM OF EMPANELMENT FOR ALL TYPE OF AUDIT:A system of empanelment for appointment of all type of audit whether Tax, Bank, society, COMPANY , SCHOOL should also be established. Like examination department, ICAI should establish an "INDEPENDENT EMPANELMENT DEPARTMENT" to take care of empanelment. All audit work should be allotted by such department. Appointment of auditor by an "Independent Body" will further leads to independence of auditor. i

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