ICWAI has received a communication from Bharat Sanchar Nigam Limited (BSNL), a fully Central Govt. owned company which is providing telecom services throughout the Nation, seeking a panel of Cost Accountant Firms for the purpose of selection and appointment of Cost Auditor from amongst such panel, for their 24 circle office and 2 District offices namely Chennai phones and Kolkata phones.
Proposed total fees including out of pocket expenses for Cost auditors for 27 circles is Rs 20,03,000/=
No, I don't want to discourage younger Members. They can very well apply with the ladder as suggested below. The revenue is more than Rs one thousand crores in each circle and also in two Telecom Districts Chennai and Calcutta and hence the fee payable as per the Institutes guidelines is more than Rs 5 Lakhs.
Pricing is a matter of strategy for the practising firm. In this case, BSNL has proposed a fees for a certain amount. However firm of Cost Accountant estimates, the fees would be more due to complexities of the assignment, it should put that in its proposal. In the proposal, the CMA firm has to demonstrate, the level of experience of its partners / employees, audit methodology, experience in telecom industry, etc to give an insight to BSNL why they should selected for the audit.
In case BSNL decides only on fees they advertised, it is likely the proposal of the CMA firm will be rejected. However BSNL will not say to the public or ICWAI, they did not get enough response from practising cost accountants.The message to BSNL would be you have to improve the fees that is commensurate with the size and complexities of audit.
------ICAI guidelines on minimum fees
. I did not find for the guideline issued by ICWAI.
Recommending minimum fees is by organisation for its member, means they function like a cartel. I feel, they can issue guideline to its members firms on how to compute the fees but the not fees itself. If any consumer organisation or a company files a case in the court on the accounting body on such guidelines that recommends its members to charge minimum fees, it is more likely the court will decide against the accounting body... as it can term it as an unfair trade practise.
See Competition Commission