Tendering and fees

In this lesson

1. 0:00 Reasons for audit firm tendering
2. 1:05 Evaluating a tender opportunity
3. 3:14 Information needed for proposal
4. 4:42 Contents of audit proposal
5. 5:53 Calculating and setting audit fees
6. 7:16 Fee arrangements and structures
7. 10:01 Low balling and ethical concerns

About this lesson

We'll explore why clients invite tenders, what factors you need to assess before accepting an engagement, and how to build a compelling proposal that demonstrates your firm's capability and value. You'll discover the key considerations when deciding whether to bid for new audit work: evaluating your resources and expertise, identifying independence threats, understanding the client's industry and risk profile, and determining whether you can deliver quality within the required timeline. The lesson walks you through the essential components of a professional proposal, from detailing your firm's experience and audit methodology to explaining how you'll manage the engagement effectively. The second half focuses on fee structures and the commercial realities of pricing audit work. You'll learn the main approaches—fixed fees, hourly rates, and contingent fees—and understand why each carries different risks and benefits. Critically, you'll explore low balling: setting fees artificially low to win business. Whilst not inherently unethical, low balling creates real dangers: it can compromise audit quality, trigger independence threats if used to cross-sell non-audit services, and damage your firm's reputation. The lesson emphasises that whatever fee structure you choose, it must be fair, recoverable, and supported by sufficient audit work to justify your opinion.

Duration: 12m