Don’t respond to Audit Tenders which don’t follow Minimum Fee Guidelines: ICAI

Various Companies/ Corporations/ PSUs/ Banks nowadays float tenders to invite Proposals/ Expression of Interest (EOI) from CA Firms, to allot audits, consultancy, other professional assignments, etc. To avoid adherence to unhealthy practices of quoting abnormally low fee to secure assignments in the tendering process, the ICAI has issued instructions/ notification to stay away from the such practices, i.e. don’t respond to Audit Tenders which don’t follow Minimum Fee Guidelines for the work areas exclusively reserved for Chartered Accountants/ CA Firms.

ICAI Notification dt. 07/04/2016: Responding to Tenders

Guideline No. 1-CA(7)/03/2016- In exercise of the powers conferred on it under Item (1) of Part II of the Second Schedule of the Chartered Accountants Act, 1949, the Council of the Institute of Chartered Accountants of India hereby issue the following guidelines for compliance by the members of the Institute,-

(i) A member of the Institute in practice shall not respond to any tender issued by an organization or user of professional services in areas of services which are exclusively reserved for chartered accountants, such as audit and attestation services. However, such restriction shall not be applicable where minimum fee of the assignment is prescribed in the tender document itself or where the areas are open to other professionals along with the Chartered Accountants.

(ii) This Guideline shall come into force with immediate effect.

ICAI Announcement dt. 04/04/2016: Responding to Tenders

The matter pertaining to responding to tenders issued by various users of professional services or organization in areas exclusively reserved for the members of the Institute was recently considered by the Council of the Institute. The Council on a consideration of the matter has decided that,-

a) In the exclusive areas of practice of Chartered Accountants, like audit and attestation services i.e. those areas where the assignments can be performed only by Chartered Accountants or where only Chartered Accountants have been invited for audit assignments, members should not respond to such tenders. In such cases, entities may avail the multipurpose empanelment data available with ICAI. However, wherever minimum fee of the assignment is prescribed in the tender document itself, members may participate in such tendering process.

b) In those areas, where along with Chartered Accountants, other professionals can also apply for the tender, there is no restriction for the Chartered Accountants to respond to the tenders floated by authorities from time to time.

The Council has further decided that its aforesaid decision be suitably issued as a guidelines of the Council under clause (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949 and any member who contravenes any of the provisions of the above guidelines shall be liable for disciplinary action under Section 21 of the Chartered Accountants Act, 1949.

While the guidelines of the Council on the above matter is being issued separately under clause (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949, this Announcement is being issued for advance information of the members at large.

ICAI Announcement dt. 22/07/2015: Mechanism to Monitor Tendering

With a view to contain the tendering system for attest functions, the Council at its special (338th) meeting considered the report of the Group constituted under the convenorship of CA. Tarun Jamnadas Ghia, Member, Central Council and decided as under:

1. Tendering has been prohibited in the exclusive areas of practice of chartered accountants like audit and attestation services. i.e. those areas where the assignments can be performed only by chartered accountants. In those areas, where along with chartered accountants, the other professionals can also apply for the tender, there is no restriction for the chartered accountants to respond to the tenders floated by authorities from time to time.

2. Members are advised to adhere to the recommended scale of fees prescribed by ICAI in the context of various professional assignments. To ensure such adherence, a member responding to a tender should be required to furnish to ICAI at the designated e-mail address [email protected] with estimated hours to be devoted by the partner/ proprietor, paid CAs, other staff and the fees quoted in the tender. Such details will be furnished by the member within a period of fifteen days of his responding to the tender. If the member is successful in securing the tendered assignment, then the member will also furnish the actual hours devoted by the partner/proprietor, paid CAs and the staff within two months of completion of the assignment.

3. Members are required to maintain cost sheet in the given format while submitting any tender/bid. The format of the same can be viewed at https://resource.cdn.icai.org/38366pdc28039.pdf

4. Members are required to maintain the cost sheet compulsorily and submit a soft copy of the bid submitted by them in response to any tender within 15 days to ICAI. The office can check whether recommended scale of fees has been followed or not in those bids, to ensure adherence to quality standards.

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CA Firms Responding to Tenders: FAQs by ICAI

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