Know Your Ethics-CA

 Know Your Ethics

Whether a member not in practice can use any other description? 

A member not in practice may use, as per the provisions of Section 7 of the Chartered Accountants Act, 1949, the designation of “chartered accountant”. However, if he chooses to use the designation of “chartered accountant”, he shall not use any other description, whether in addition, or in substitution thereof. However, such a member is not prohibited from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other Institute of accountancy, whether in India or elsewhere, as may be recognised in this behalf by the Council, or any other qualification that he may possess. 

Q. Whether a messaging application can be used by a member in practice to send messages to make people aware about their new practice and mention the services provided therein? No, it is not permissible to use a messaging application to send messages to make people aware about their new practice, and mention the services provided therein. 

Q. Whether a member in practice can advertise their services on social networking websites? Yes, a member in practice may advertise through a write up on social networking websites setting out his particulars or services, subject to the Council Guidelines for Advertisement, 2008. These Council Guidelines are appearing in Volume-II of Code of Ethics, 2020. 

Q. Whether a write-up in an Advertisement may contain any information about an achievement or award given to a member? Yes, a write-up may contain information about an achievement or award given to a member, provided it has been awarded by the Central or State Governments or Regulatory bodies. 

Q. Whether a member in praactice 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. 

Q. 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, 2020 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. 

Q. 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 Chartered Accountants Act, 1949 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. 

Q. 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 Chartered Accountants Act, 1949 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. 

Q. 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. 

Q. 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 Chartered Accountants Act, 1949 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 Chartered Accountants Act, 1949 or under Regulation 53B(2) of the Chartered Accountants Regulations, 1988 provided they share fees of the partnership business both within India and outside India. 

Q. Whether a practicing Chartered Accountant can be a partner or designated partner in a Limited Liability Partnership, which is not doing professional work, but is in the commercial activities? No, as per paragraph 2.14.1.4(ii) under Clause (4) of Part-I of First Schedule to the Chartered Accountants Act, 1949, appearing in Volume-II of Code of Ethics, 2020, a practicing Chartered Accountant cannot be a partner or designated partner in a Limited Liability Partnership, which is not doing professional work, but is in the commercial activities.

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