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  • Based on the ethical point of view the CA Director of a company should not participate in board meeting and therefore withdraw himself when the item relating to his client(s) is considered by the Board.
  • Members from Industry as well as from Practice can pursue the AMFI (Association of Mutual Funds in India ) Course. However, as to the question whether a member can be registered with it so as to take the role of Financial Intermediary, it has been decided that members in Industry /otherwise not in practice can obtain the membership by registering them with a mutual fund /Association whereas members in practice can not do so whether holding full time COP or Part time COP.
  • Engagement by a member in practice in the business of buying and selling shares amounts to be ‘any business’ within the meaning of Clause(11) of Part-I of the First Schedule and hence the prior permission of the Council is required.
  • It is prohibitive to undertake the assignments of Internal Audit of a client and entry of the transaction for Accounting, simultaneously being violative of the provisions of the ‘Guidance Note on Independence of Auditors’.
  • Concurrent audit and the assignment of Quarterly review of the same entity cannot be taken simultaneously as the concurrent audit being a kind of internal audit and the quarterly review being a kind of Statutory audit undertaken simultaneously are prohibited under the provisions of ‘Guidance Note on Independence of Auditors’.
  • Publishing a book by a firm containing its history for the purpose of distributing to clients , associates, friends and well wishers and printing of the words ‘ Celebrating 75 years in the profession’ on special letterheads and envelopes will lead to solicitation of professional work, hence not permissible as per the provisions of Clauses(6) and (7) of Part I of the First Schedule to the Chartered Accountants Act, 1949.
  • Member is not permitted to use his letterhead containing the name and address of his firm for presenting before the public at large , as it contains a promotional element and leads to solicitation of professional work.
Ethical issues in Question- Answer form

Q. What is ‘professional or other misconduct’ ?
A. ‘Professional or other misconduct’ refers to an action or omission listed out in the two schedules of the CA Act, 1949 . However, this does not purport to be a comprehensive definition as the scope of this term is expanding in view of the power conferred under the Act on the Director (Discipline) to enquire into the conduct of members under any other circumstances.

Q. What is the distinction between the two Schedules?
A. The two Schedules are distinguished on the basis of gravity of misconduct described therein. The misconduct listed in the Second Schedule is understood to be grave and serious prescribing higher punishment.

Q. Can a Member in practice render ‘ Management Consultancy and other Services’?
A. Yes, the areas permitted under the ‘ Management Consultancy and other Services’ have been specified by the Council ( appearing at pages 103-104 of the Code of Ethics, 2009 ) pursuant to Section 2 (2)(iv) of the CA Act, 1949.

Q. Whether a member in practice permitted to undertake the management of NRI funds?
A. No, a member in practice is not permitted to undertake such services as it is not covered under ‘ Management Consultancy and other Services’ specified by the Council.

Q. Can a chartered accountant in practice provide ‘Portfolio Management Services’(PMS)?
A. No, as the ‘ Management Consultancy and other Services’ expressly bars the activities of broking, underwriting and portfolio management.

Q. Can a chartered accountant undertake practice after getting the CA final pass certificate?
A. No, a chartered Accountant requires the Certificate of Practice (CoP) issued by the Institute after getting the final pass certificate to practice as a chartered accountant.

Q. Can a chartered accountant in practice work as a ‘ collection agent’?
A. No, a chartered accountant in practice can not work as a ‘ collection agent’ as, the ‘ Management Consultancy and other Services’ specified by the Council , do not permit such engagement.

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