CA firm’s Re 1 audit fee sparks debate (CAclubindia)

CAclubIndia reports that a Chartered Accounting firm secured a high-profile statutory audit assignment by quoting a token fee of Re 1, triggering widespread debate on audit quality, conflicts with ICAI recommended fees, and professional ethics. The article narrates tender facts, reactions from the auditing fraternity, and concerns about whether ultra-low fee bids undermine independence, capacity to perform adequate audit procedures, and compliance with auditing standards. It explores legal/ethical questions: the ICAI’s fee recommendations versus market tendering rules, the risk of compromising audit quality for market entry, and potential regulatory/disciplinary implications if a low fee results in deficient audit work. For audit committees, regulators and procuring authorities, the incident is a cautionary tale on procurement based purely on lowest bid—raising calls for due diligence in tender evaluation, minimum technical criteria, and safeguards to protect audit quality and public interest. The write-up suggests policy responses (transparent evaluation matrices, mandatory staffing/experience requirements) to reconcile competitive bidding with professional responsibilities.