Auditing Question?!?

Offering a competitive bid to land a client could be a possibility, but the biggest reason by far is the first-year audit is going to require a lot more work on the part of the CPA in terms of gaining an understanding and documenting the client's business, internal controls, accounting policies and procedures, etc., etc. It is presumed that in years subsequent to the initial audit that the auditor will recoup the initial year costs, and that the engagement will become routine and eventually profitable.

he's not very good at math?

It may be a reduced initial scope audit, or it may be a marketing/business tactic.