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Ethical Standards Board

Chairman, Ethical Standards Board
CA. Prafulla P Chhajed

Phone: 9320350007
Mobile: 9320350007


Purpose & Objective


“The Institute of Chartered Accountants of India (ICAI) is a statutory body established under The Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountants in India. The Council of ICAI is empowered to discharge the provisions of the Act, and regulate and maintain the standards of the profession. In pursuance of this, ICAI has established the Ethical Standards Board to function as standard setting body. The Ethical Standards Board develops and issues ethical standards and other pronouncements for chartered accountants. It works towards evolving a dynamic and contemporary Code of Ethics and ethical behaviour for members while retaining the long cherished ideals of `excellence, independence, integrity’ as also to protect the dignity and interests of the members”.


The objective of Ethical Standards Board is to set up ethical standards for chartered accountants, converge with the International best practices on ethics, subject to local laws, thereby enhancing the quality and consistency of services provided by chartered accountants and strengthening the public confidence in the profession.

Terms of Reference

  • To examine various issues concerning Code of Ethics governing the members of the Institute.
  • To establish standards for Chartered Accountants for regulation and maintenance of status and standards of professional qualification of members of the Institute
  • To examine and advise on any ethical matters referred to the committee.
  • To review periodically and publish the revised Code of Ethics and their publications relating to ethics.
  • To promote public awareness and confidence in the integrity, objectivity, competence and professionalism of members and to co-ordinate with other Committees.
  • To examine and deal with the complaints of members against their unjustified removal as auditors of any entity as per procedure evolved and to take necessary steps to protect the interest of the members.
  • The Ethical Standards Board will review the terms of reference at every two years

Form of Complaint/Statement of Reasons for unjustified removal of auditor to be filed before the Ethical Standards Board.


  • CA. Prafulla P Chhajed, Chairman
  • CA. Kemisha Soni, Vice-Chaiperson
  • CA. Nihar N Jambusaria, President (Ex-officio)
  • CA.(Dr.) Debashis Mitra, Vice-President (Ex-officio)
Read More....

Knowledge Sharing

Significant Achievements /Initiative of Ethical Standards I 2019-20 and 2020-21


  • The revised 12th edition of Code of Ethics has been diversified into three Volumes :
    Volume - I as convered with the provisions of International Ethical
    Standards Boards of Accountants (IESBA)
    Volume - II based on domestic provisions governing the members of the Institute.
    Volume - III being compilation of Disciplinary Cases of the institute.

  • The fourth edition of “FAQs on Ethical Issues”, publication of Ethical Standards Board, has been issued at the Annual Function of the Institute held on 9th February,2021. It incorporates changes brought out by the new Code of Ethics.

  • The Ethical Standards Board come up with a booklet for members in practice being independent director or Director Simplicitor in Companies This booklet contains relevant provisions of Companies Act, 2013, the Chartered Accountants Act, 1949, Code of Ethics, frequently asked questions and the decisions of the Ethical Standards Board taken from time to time on the said issue.

  • The Electronic Code or E-Code on the Volume-I of Code of Ethics has been launched at the Digital platform of the Institute. It will enable better ease of use as compared to the ordinary soft copy version of the Code, and hence aid in adoption and implementation of Code of Ethics

  • A video presentation has been prepared by the Ethical Standards Board, containing significant changes in new Code of Ethics, as compared to its previous edition, for the awareness among the members on provisions of revised Code of Ethics.

  • The first edition of quarterly E-Newsletter the Ethical Standards Board for the year 2020-2021 has been issued. This E-newsletter seeks to make the members aware of professional ethics and acts as an informational tool to share recent developments with regards to initiatives that are taken by the Ethical Standards Board.

  • Creatives of Code of Ethics – Learning series (on provisions of Volume-I of Code of Ethics , and FAQs (based on domestic provisions of Code of Ethics Volume-II ) have been regularly issued on social media platforms of Ethical standards Board.These have helped members at large for the dissemination of knowledge on revised Code of Ethics.

Recent Decisions of Ethical Standards Board
1. It is not permissible for a member in practice to accept the appointment of statutory audit of the society wherein immediate family member i.e., spouse or dependent, of member hold honorary position of one of the managing committee of the institutes governed by the society.
2. The Council decided that for the purpose of Appointment of an auditor when he is indebted to a concern, as dealt with under Chapter X of the Council General Guidelines, 2008, the term “auditor’ shall not include internal auditor, concurrent auditor or an auditor giving report to the Management. In other words, the provision relating to criteria/limit of indebtedness shall apply only to statutory audits.
3. A CA Firm may register itself on Udyog Aadhar, a web portal of Ministry Micro, Small and Medium Enterprises.
4. There is no prohibition for internal auditor of a company to acquire/purchase shares of the said Company.
5. It is not permissible for a member to use Messaging Applications to send messages to make people aware about his practice, and mention the services provided therein.
6. A Chartered Accountant in practice being Director Simplicitor in a Company cannot sign ROC Forms of the Company as it is a direct conflict of role.
7. A Chartered Accountant in practice can act as Authorized Representative of a Foreign Company, provided he is not the auditor of the said Company.
8. It is permissible for two or more Chartered Accountants in practice collectively to have joint training session for their clients on GST, and share the fees collected from the clients thereof.
9. A chartered accountant in practice can provide services through kiosk only if the services provided are professional activities of a practicing chartered accountant, permitted under the Act.
10. A Chartered Accountant in service is allowed to take e-return registration if it does not conflict with employment obligation. However, he cannot certify the return.
11. In case where Chartered Accountant in practice is a non-executive director in a company, he or a Firm in which he is a partner, should not accept the appointment as a statutory auditor of a Company which is a joint venture of the original Company, as it would impact independence.
12. A Chartered Accountant in practice may be an equity research adviser, but he cannot publish retail report, as it would amount to other business or occupation.
13. There is no conflict of interest in a Chartered Accountant, who is a member of a Trust, being the auditor of the said trust. It is subject to the exception where a particular statute governing a Trust prescribes prohibition on the member of the Trust to be its Auditor or otherwise where there is conflict of interest as per the provisions of Code of Ethics.
14. A Chartered Accountant in practice may engage himself as Registration Authority (RA) for obtaining digital signatures for clients.
15. A Chartered accountant can hold the credit card of a bank when he is also the auditor of the bank, provided the outstanding balance on the said card does not exceed Rs 100,000* beyond the prescribed credit period limit on credit card given to him. (*As per the limit of indebtedness existing as on date.)
16. A Chartered Accountant in practice can act as mediator in Court, since acting as a “mediator” would be deemed to be covered within the meaning of “arbitrator’; which is inter-alia permitted to members in practice as per Regulation 191 of the Chartered Accountants Regulations, 1988.
17. A Chartered Accountant in practice is not permitted to accept audit assignment of a bank in case he has taken loan against a Fixed Deposit held by him in that bank.
18. The Ethical Standards Board in 2013 generally apply the stipulations contained in the then amended Rule 11U of Income Tax generally, wherein statutory auditor /tax auditor cannot be the valuer of unquoted equity shares of the same entity.

The Board has at its recent Meeting (January, 2017) has reviewed the above, and decided that where law prohibits for instance in the Income Tax Act and the rules framed thereunder, such prohibition on statutory auditor/tax auditor to be the valuer will continue, but where there is no specific restriction under any law, the said eventuality will be permissible, subject to compliance with the provisions, as contained in the Code of Ethics relating to independence.
19. The Ethical Standards Board had in 2011 decided that it is not permissible for a member who has been Director of a Company, upon resignation from the Company to be appointed as an auditor of the said Company, and the cooling period for the same may be 2 years.

The Board has at its recent Meeting (January, 2017) has reviewed the above, and noted that the Section 141 of Companies Act, 2013 on disqualification of auditors does not mention such prohibition; though threats pertaining to the said eventuality have been mentioned in Code of Ethics.

Further, the Board was of the view that a member may take decision in such situation based on the provisions of Companies Act, 2013 and provisions of Code of Ethics.
20. A chartered accountant in practice cannot become Financial Advisors and receive fees/commission from Financial Institutions such as Mutual Funds, Insurance Companies, NBFCs etc.
21. A chartered accountant cannot exercise lien over the client documents/records for non-payment of his fees.
22. It is not permissible for CA Firm to print its vision and values behind the visiting cards, as it would result in solicitation and therefore would be violative of the provisions of Clause (6) of Part-I of First Schedule to the Chartered Accountants Act, 1949.
23. It is not permissible for chartered accountants in practice to take agencies of UTI, GIC or NSDL.
24. It is permissible for a member in practice to be a settlor of a trust.
25. A member in practice cannot hold Customs Brokers Licence under section 146 of the Customs Act, 1962 read with Customs Brokers Licensing Regulations, 2013 in terms of the provisions of Code of Ethics.
26. A Chartered accountant in service may appear as tax representative before tax authorities on behalf of his employer, but not on behalf of other employees of the employer.
27. A chartered accountant who is the statutory auditor of a bank cannot for the same financial year accept stock audit/inspection Audit of the same branch of the bank or any of the branches of the same bank or sister concern of the bank, for the same financial year.
28. A CA Firm which has been appointed as the internal auditor of a PF Trust by a Government Company cannot be appointed as its Statutory Auditor.
29. A concurrent auditor of a bank ‘X’ cannot be appointed as statutory auditor of bank ‘Y’, which is sponsored by ‘X’.
30. A CA/CA Firm can act as the internal auditor of a company & statutory auditor of its employees PF Fund under the new Companies Act (2013).
31. The Ethical Standards Board while noting that there is requirement for a Director u/s 149(3) of the Companies Act, 2013 to reside in India for a minimum period of 182 days in the previous calendar year, decided that such a Director would be within the scope of Director Simplicitor (which is generally permitted as per ICAI norms) , if he is non –executive director, required in the Board Meetings only , and not paid any remuneration except for attending such Board Meetings.

1. Engaging in Derivatives' transactions by members in practice (FAQs)
2. FAQs on Communication and changes in Professional Appointments
3. Clarification on Statutory Auditor of a Company giving feedback to Credit Rating Agencies about Auditee Client
4. FAQs on Books, Articles and Presentations by Members in Practice
5. Clarification on Fees from a Single Client
6. Communication with the Retiring Auditor through E-mail (FAQs on Communication)
7. Advisory on Mentioning Fees in Advertisements issued by Members
8. FAQs relating to professional Ethics of members pertaining to Bank Assignments
9. Announcement on Internal Auditor not to undertake GST Audit simultaneously (28.9.2018)
10. FAQs on Ethical Issues relating to GST
11. Announcement on advertising by members in practice engaged in coaching/ teaching institute (18.5.2017)
12. Announcement on KYC Norms (applicable w.e.f 1/1/2017)
13. Announcement on ICAI Code of Conduct for elected, nominated and co-opted representatives (Applicable w.e.f 1.1.2017)
14. Announcement on use of designation(s) other than the designation of "Chartered Accountant". (Issued: February, 2015)
15. Announcement on prohibition to undertake the assignment of audit and accounting work together for the same entity.(Issued: May, 2014)
16. Announcement on Ranking of CA Firms.(Issued : March, 2014)
17. Announcements - Amendment in Council General Guidelines , 2008 (Issued : June, 2011)
1. Continuing Audit in case of pending Fees of earlier year(s)
2. Clarification on a member in practice being a Karta of a HUF making investment.
3. Clarifications on some commonly asked queries pertaining to elected representatives of ICAI and the general members of ICAI
4. Clarification on Concurrent Auditor undertaking the assignment of Quarterly Review.
5. Clarification on Tax Audit Assignments
6. Clarification on acting as recovery consultant in Banking Sector
7. Clarification on Sharing of Fees with Government
8. Clarification regarding (1) Listing with bodies creating data-base for independent directors of Chartered Accountants and (2) Acting as E-Intermediary.
9. Clarification on Chartered Accountants acting as Direct Selling Agent (DSA)- Ethical issues involved.
10. Clarification regarding transfer of Goodwill of Chartered Accountant Firms
11. Clarification on whether the Auditor of a Subsidiary Company can be a Director of its Holding Company.
1. FAQ on Ethical Issues, 2021
2. Code of Ethics, 2019 Volume - I  (Announcement on applicability of Revised Code of Ethics w.e.f. 1.7.2020)
3. Code of Ethics, 2020 Volume-II (Applicable w.e.f 1.7.2020)
4. Code of Ethics, 2020 Volume - III
5. Code of Ethics, 2009
6. Guidance Note on Independence of Auditors, 2005
Guidelines/ Features
1. Corporate Form of Practice Guidelines
2. Council Guidelines for Conversion of CA Firms into LLP
3. Advertisement Guidelines including CA/CA Firm website guidelines. (updated till February, 2020)
4. COUNCIL GENERAL GUIDELINES, 2008 (updated till February,2020)
5. Guidelines of the Council in the context of use of designation etc. and manner of Printing of Letter-heads and visiting cards.
6. Revised Resolution passed by the Council under Regulation 190A (effective from 9th August, 2008)
7. Know Your Ethics
8. CA Logo Guidelines

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