Professional Misconducts of a Chartered Accountant – Don’ts
1. CA in practice shall be deemed to be guilty of professional misconduct, if he expresses his opinion on financial statements of any business or any enterprise in which he, his firm or a partner in his firm has substantial interest
2. A member is a director of a company the financial statements of which are to be audited and/or opinion is to be expressed, he should not undertake such a job and/or express opinion on the financial statements of that company.
3. CA Act prescribes that an auditor is not permitted to write the books of accounts of his auditee clients.
4. A member in practice is not qualified to be appointed as statutory auditor of one subsidiary company when he is the internal auditor of another subsidiary of the same holding company.
5. A member in practice will be liable in a case where he was alleged to have signed two balance sheets on two different dates for the same financial year, the first one with a clean report and the second one with a qualified report.
6. A member in practice will be liable if he fails to obtain sufficient information to warrant the expression of an opinion or his exceptions are sufficiently material to negate the expression of an opinion
7. A member in practice shall be deemed to be guilty of professional misconduct, if he fails to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances
8. A member of the Institute in practice or a partner of a firm in practice or a firm shall not accept appointment as auditor of a concern while indebted to the concern or given any guarantee or provided any security in connection with the indebtedness of any third person to the concern, for amount exceeding Rs. 10,000/-
9. Council has decided that Tax Auditor cannot as an Internal Auditor or vice-versa for the same financial year.
10. Concurrent audit and the Assignment of quarterly review of the same entity cannot be taken simultaneously as the concurrent audit is a kind of internal audit and the quarterly review is a kind of statutory audit.
Professional Misconducts of a Chartered Accountant- Do’s
1. A member holding Certificate of Practice can own and hold agricultural land and continue agricultural activity.
2. A member in practice can be a sleeping partner in a family business concern provided he takes specific permission from the Council
3. A member of the Institute in practice or the firm of Chartered Accountants of which he is a partner, shall maintain and keep in respect of his / its professional practice, proper books of account including a Cash Book and a Ledger.
4. A member of the Institute in practice is generally permitted to act as a Surveyor and Loss Assessor under the Insurance Act, 1938 provided they are otherwise eligible and can perform attest functions.
5. Statutory auditor can accept the assignment of a system audit of the same entity, provided it did not involve any scrutiny/review of financial data and information.
6. Member must take care to see that they do not land themselves in situations where there could be conflict of interest and duty. For example, where a Chartered Accountant is appointed the Liquidator of a Company, he should not qua a Chartered Accountant himself, audit the Statement of Accounts to be filed
7. Council has issued a Guidance Note on Revision of the Audit Report in Book Form. The Auditor can revise his audit report in the situations and circumstances mentioned therein
8. With regard to the size of the signboard for his office that a member can put up. The size of the signboard should be reasonable. Use of glow signs or lights on large-sized boards as is used by traders or shopkeepers would not be proper.
9. A member in practice is not permitted to undertake the management of NRI funds because the same is not covered under “Management Consultancy and Other Services” permitted to be rendered by the practicing members of the Institute.
Disclaimer: The information contained in this article is based on knowledge obtain from ICAI Publications. It is provided for general guidance to the intended user. I recommend that professional advice is necessary before taking any action on the basis of the article provided.
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