2.2       Query

Acceptance of Audit by Undercutting Audit Fees –1.

A firm of Chartered Accountants ‘X’ were the Auditors of a concern for the previous year on a remuneration of Rs.400/-.  The management of the concern appointed for the current year Messrs ‘X’, and ‘Y’-another Chartered Accountant-as the Joint Auditors on a total remuneration of Rs.500/-(to be equally shared by them).

Would it be a breach of professional etiquette for ‘Y’ to accept the appointment on the grounds of undercutting (as the remuneration per auditor is obviously reduced). Whether Messrs ‘X’should object or not?

                                                                    Opinion                                                  July 7,1962

Prima facie there does not appear to be any undercutting, and therefore no breach of professional etiquette is involved.

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