A CA being a partner is doing Tax Audit and other Audit works like other partners and sharing it with firm. But he is also giving consultancy to his personal International clients not related to firm and taking the fees in his personal bank account which is not shown in partnership firm.
If this is true then why Institute says that a CA in Practice cannot do a separate Business apart from his practice, Is this you do not call a Business?
Is any separate permission required from Institute?
18 July 2024
In the context of a Chartered Accountant (CA) in practice, there are certain ethical and regulatory guidelines that need to be followed regarding additional professional activities and business engagements outside the partnership firm. Here’s a detailed explanation:
1. **Partnership Firm Activities:** - As a partner in a CA firm, it is common for CAs to engage in various audit and consultancy services as part of the firm’s activities. These services include Tax Audit, Statutory Audit, and other related assignments.
2. **Personal Consultancy Activities:** - If a CA wishes to engage in consultancy services for personal international clients outside of the partnership firm, there are specific considerations: - **Independence and Objectivity:** The CA must ensure that these personal consultancy services do not compromise the independence or objectivity of the firm’s audit assignments. There should be no conflict of interest between the firm’s clients and the CA’s personal clients. - **Disclosure:** The CA should disclose these personal consultancy activities to the firm and ensure that they do not affect the reputation or integrity of the firm. - **Separate Fees and Bank Account:** It is permissible for the CA to receive fees for these personal consultancy services in a personal bank account, distinct from the firm’s accounts. This practice is allowed as long as the activities do not overlap with the firm’s engagements and there is no misleading representation to clients.
3. **Institute Guidelines:** - The Institute of Chartered Accountants of India (ICAI) provides guidelines and regulations regarding the conduct of CAs in practice. While CAs are encouraged to focus primarily on their practice within the firm, they are allowed to engage in additional activities as long as they adhere to ethical standards and professional conduct rules. - **Separate Business:** The ICAI generally discourages CAs from running separate business ventures that could create a conflict of interest or detract from their primary practice responsibilities. However, providing consultancy services to personal clients in a separate capacity is typically permissible if managed appropriately.
4. **Permission Requirements:** - There is no specific permission required from the ICAI to engage in personal consultancy activities outside of the firm. However, it is essential to comply with the Code of Ethics and Professional Conduct prescribed by the ICAI. This includes maintaining professional independence, confidentiality, and integrity in all professional engagements.
In summary, a CA in practice can engage in personal consultancy activities outside of their firm’s engagements, provided they maintain ethical standards, disclose these activities to the firm, and ensure no conflict of interest arises. It is essential to comply with ICAI guidelines to uphold the integrity and professionalism of the CA profession.
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