"Can a Chartered Accountant in practice allow any person to practice in his name as a Chartered Accountant?
No, Clause (1) of Part-I of the First Schedule to the Act prohibits a Chartered Accountant in practice to allow any person to practice in his name as a Chartered Accountant unless such person is also a Chartered Accountant in practice and is in partnership with or employed by him.”
[FAQs on Ethical Issues (Revised Edition 2021), p 9]
“Whether the member in practice can permit his name or the name of his firm to be used in connection with an estimate of earnings contingent upon future transactions in a manner which may lead to the belief that he vouches for the accuracy of the forecast?
No, as per clause (3) of part-I of Second Schedule to the Act, a member in practice will be deemed to be guilty of professional misconduct if he permits his name or the name of his firm to be used in connection with an estimate of earnings contingent upon future transaction in a manner which may lead to the belief that he vouches for the accuracy of the forecast……………………………….”
[FAQs on Ethical Issues (Revised Edition 2021), pp 39- 40]
“Can a Chartered Accountant in practice pay to any person any share, commission or brokerage in the fees or profits of his professional business?
No, Clause (2) of Part-I of the First Schedule to the Act prohibits a Chartered Accountant in practice from paying or allowing any share, commission or brokerage in the fees or profits of his professional business, to any person other than a member of the Institute or a partner or a retired partner or the legal representative of the deceased partner or a member of any other professional body or with such other persons having such qualifications as may be prescribed, for the purpose of rendering such professional services from time to time in or outside India.”
[FAQs on Ethical Issues (Revised Edition 2021), p 9]
“Whether a Professional Accountant in Public Practice may pay or receive a referral fees or commission?
As per Paragraph 2.14.1.3(ii) under Clause (3) of Part-I of First schedule to the Act, appearing in Volume-II of Code of Ethics, it is not prohibited for a member in practice to charge Referral Fees, being the fees obtained by a member in practice from another member in practice in relation to referring a client to him. The above should be read with ………………..”
[FAQs on Ethical Issues (Revised Edition 2021), p 60]
“Can a Chartered Accountant in Service accept or agree to accept any part of fees, profits or gains from a lawyer, a chartered accountant or broker engaged by such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification?
No, Clause (2) of Part II of First Schedule to the Act prohibits a member in service from accepting or agreeing to accept any part of fees, profits or gains from a lawyer, a Chartered Accountant or broker engaged by such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification.”
[FAQs on Ethical Issues (Revised Edition 2021), pp 39]
“Can a Chartered Accountant in practice share his fees with the Government in respect of Government Audit?
The Institute came across certain Circulars/Orders issued by the Registrar of various State Co-operative Societies wherein it has been mentioned that certain amount of audit fee is payable to the concerned State Govt. and the auditor has to deposit a percentage of his audit fee in the State Treasury by a prescribed challan within a prescribed time of the receipt of Audit fee. In view of the above, the Council considered the issue and while noting that the Government is asking auditors to deposit such percentage of their audit fee for recovering the administrative and other expenses incurred in the process, the Council decided that as such there is no bar in the Code of Ethics to accept such assignment wherein a percentage of professional fees is deducted by the Government to meet the administrative and other expenditure.”
[FAQs on Ethical Issues (Revised Edition 2021), pp 9-10]
“Can a member share profits with the widow of his deceased partner?
Yes, when there are two or more partners and one of them dies, the widow of the deceased partner can continue to receive a share of the profit of the firm. A legal representative, say widow of a deceased partner, would be entitled to share the profits only where the partnership agreement contains a provision that on the death of the partner his widow or legal representative would be entitled to such payment by way of sharing of fees or otherwise for the specified period.”
[FAQs on Ethical Issues (Revised Edition 2021), p 12]
“Can a Chartered Accountant in practice enter into partnership with a practicing Chartered Accountant of a recognized foreign professional body for sharing fee of their partnership within India?
Yes, Clause (4) of Part-I of First Schedule to the Act permits partnership between members of the Institute and the members of the recognized foreign professional bodies either by the Central Government or the Council of the Institute by virtue of either under Section 29(2) of the Act or under Regulation 53B(2) of the CA Regulations provided they share fees of the partnership business both within India and outside India.”
[FAQs on Ethical Issues (Revised Edition 2021), p 13]
“Can a member in practice be part of Association of persons (AOP), with other members, or other professionals?
No, it is not permissible for a member in practice to be part of Association of persons, whether or not comprising of other professionals, since as per the provisions of the Act, only Firms and LLPs are the two modes of practice , apart from practicing in individual capacity.”
[FAQs on Ethical Issues (Revised Edition 2021), p 6]
“Can a member in practice be Promoter/Promoter Director of the Company?
Yes, there is no bar for a member to be a promoter/signatory to the Memorandum and Articles of Association of any company. There is also no bar for such a promoter/signatory to be a Director Simplicitor of that company irrespective of whether the objects of the company include areas, which fall within the scope of the profession of Chartered Accountants. Therefore, members are not required to obtain specific permission of the Council in such cases. There is also no bar on holding any number/percentage of shares in the company.”
[FAQs on Ethical Issues (Revised Edition 2021), p 51]
“Can a member in practice be a sleeping partner in family business concern?
Yes, a member in practice can be a sleeping partner in a family business concern provided he takes prior and specific permission from the Council in terms of Regulation 190A of CA Regulations. He will, however, not be entitled to do attest functions.”
[FAQs on Ethical Issues (Revised Edition 2021), p 51]
“Can a member who is in part-time/full time employment apply for Certificate of Practice and do attest functions?
Yes, he can apply for Certificate of Practice but cannot do attest functions. Please refer Regulation 190A of the CA Regulations.”
[FAQs on Ethical Issues (Revised Edition 2021), p 51]
“Can a practicing Chartered Accountant secure any professional business through the services of a person who is not his employee or partner?
No, Clause (5) of Part-I of First Schedule to the Act prohibits a practicing Chartered Accountant from securing any professional business, either through the services of a person who is not an employee of such Chartered Accountant, or who is not his partner.”
[FAQs on Ethical Issues (Revised Edition 2021), p 13]
“Can a practicing Chartered Accountant solicit clients or professional work by advertisement?
No, Clause (6) of Part-I of the First Schedule to the Act prohibits a practicing Chartered Accountant from soliciting clients or professional work either directly or indirectly by circular, advertisement, personal communication or interview or by any other means. However, there are following exceptions to it …………………….”
[FAQs on Ethical Issues (Revised Edition 2021), pp 13-14]
“Can a Chartered Accountant in practice seek professional work from his professional colleagues?
Yes, in terms of proviso (i) of Clause (6) of Part-I of the First Schedule to the Act, a member is permitted to apply or request for or to invite or to secure professional work from another Chartered Accountant in practice……………………”
[FAQs on Ethical Issues (Revised Edition 2021), pp 17-18]
“Can a Chartered Accountant in practice accept original professional work emanating from the client introduced to him by another member?
No, Paragraph 2.14.1.6(iv)N under Clause (6) of Part I of the First Schedule to the Act, as appearing in Volume II of the Code of Ethics, prescribes that a member should not accept the original professional work emanating from a client introduced to him by another member. If any professional work of such client comes to him directly, it should be his duty to ask the client that he should come through the other member dealing generally with his original work.
[FAQs on Ethical Issues (Revised Edition 2021), pp 19-20]
“Whether a member in practice or a Firm may give link of its website on a social networking site?
Yes, a member in practice or a Firm may provide link of its webpage on Social Networking site. However, the members should not solicit people to visit or request to like their respective page(s) on such social Networking site.”
[FAQs on Ethical Issues (Revised Edition 2021), p 8]
“Whether members in practice can list themselves with online Application based service provider Aggregators?
No, Council Guidelines for Advertisement, 2008 appearing in Volume-II of Code of Ethics prohibits members in practice to list themselves with online Application based service provider Aggregators, wherein other categories like businessmen, technicians, maintenance workers, event organizers etc. are also listed.”
[FAQs on Ethical Issues (Revised Edition 2021), p 8]
“Can a Chartered Accountant in practice solicit professional work by making roving enquiries?
No, it is not permissible for a member to address letters, emails or circulars to persons who are likely to require services of a Chartered Accountant. It would tantamount to advertisement as per Paragraph 2.14.1.6(iv)K under clause (6) of Part-I of the First Schedule to the Act, appearing in Volume II of Code of Ethics.”
[FAQs on Ethical Issues (Revised Edition 2021), pp 17]
“Whether a member in practice, engaged in Coaching/teaching activities in accordance with general and specific permission of the Council, may advertise such Coaching /teaching activities?
A member in practice, engaged in Coaching/teaching activities in accordance with general and specific permission of the Council should abstain from advertisement of such Coaching /teaching activities, as it may amount to indirect solicitation, as well as solicitation by any other means, and may therefore be violative of the provisions of Clause (6) of Part I of the First Schedule to the Act. However……………”
[FAQs on Ethical Issues (Revised Edition 2021), pp 14-15]
