Another business
This query is : Resolved
25 September 2013
whether practicing Chartered accountant can pursue trading on business as another profession ? If no, whether there is penalty chargeable under companies act.
28 November 2013
Hi
A Chartered Accountant in practice is PROHIBITED:
• to pay commission/brokerage or share of profits of his professional business to/with any person other than a member of the Institute.
• from soliciting clients or professional work by circular, advertisement etc. except for advertisement as per the guidelines dt.14th May, 2008 issued by the Council
• from being Director of a Holding Company in whose subsidiary he is the auditor.
• from responding to advertisements inviting application for appointment of auditors, tenders or circulars or enquiry (made to more than one member) inviting quotation restricted to CA.
However members can respond to tenders in the areas where they compete with non CAs. They can also respond to tenders in the audit field outside the country provided the fees are received in foreign currency. The members are permitted to pay a reasonable amount as price for tender/bid document. In general no earnest money/security deposit is permissible in areas which are exclusive to Chartered Accountants as per Law. However, in non-exclusive area the members are permitted to pay earnest money/security deposit. If only Chartered Accountants are invited in non-exclusive area, the members are permitted to pay reasonable amount towards earnest money/security deposit.
• from expressing his opinion on financial statements of any business or enterprise in which one or more persons who are his ‘relatives’ within the meaning of Section 6 of the Companies Act, 1956 have, either by themselves or in conjunction with such member, a substantial interest in the said business or enterprise.
A Chartered Accountant in practice is PROHIBITED:
• to pay commission/brokerage or share of profits of his professional business to/with any person other than a member of the Institute.
• from soliciting clients or professional work by circular, advertisement etc. except for advertisement as per the guidelines dt.14th May, 2008 issued by the Council
• from being Director of a Holding Company in whose subsidiary he is the auditor.
• from responding to advertisements inviting application for appointment of auditors, tenders or circulars or enquiry (made to more than one member) inviting quotation restricted to CA.
However members can respond to tenders in the areas where they compete with non CAs. They can also respond to tenders in the audit field outside the country provided the fees are received in foreign currency. The members are permitted to pay a reasonable amount as price for tender/bid document. In general no earnest money/security deposit is permissible in areas which are exclusive to Chartered Accountants as per Law. However, in non-exclusive area the members are permitted to pay earnest money/security deposit. If only Chartered Accountants are invited in non-exclusive area, the members are permitted to pay reasonable amount towards earnest money/security deposit.
• from expressing his opinion on financial statements of any business or enterprise in which one or more persons who are his ‘relatives’ within the meaning of Section 6 of the Companies Act, 1956 have, either by themselves or in conjunction with such member, a substantial interest in the said business or enterprise.
28 November 2013
A Chartered Accountant in practice CANNOT:
• Use any designation other than Chartered Accountant on professional documents, visiting cards, letterheads or signboard. The Council has decided that a member of the institute shall not be permitted to use initials "CPA" (standing for Certified Public Accountant) on his visiting card.
• Charge fees on a percentage of profits or which are contingent upon the findings, or results of such work provided that.
a. In the case of a receiver or a liquidator, the fees may be based on a percentage of the realisation or disbursement of the assets.
b. In the case of an auditor of a co-operative society the fees may be based on a percentage of the paid-up capital or the working capital etc.
c. In the case of a valuer for the purposes of direct taxes and duties, the fees may be based on a percentage of the value of the property valued.
• Engage in any business other than the profession of chartered accountants unless permitted by the Council.
• Accept position as auditor previously held by another chartered accountant without first communicating with him in writing.
• Accept any other work/assignment/service on a remuneration, which exceeds the fees payable for statutory audit of the same undertaking. (Applicable only in respect of statutory audits of public sector undertaking/Govt. Companies/Listed companies/other public companies with turnover of Rs. 50 crores or more in a year for appointments after 1st April, 2002 — Ref: Notification No. 1-CA(7)/60/2002 published in CA Journal-March, ’02 issue).
• Accept or carry out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:— (notification No.1-CA(7)/93/2006 published in CA journal on page 652 of October, ’06 issue):
A Chartered Accountant in practice CANNOT:
• Use any designation other than Chartered Accountant on professional documents, visiting cards, letterheads or signboard. The Council has decided that a member of the institute shall not be permitted to use initials "CPA" (standing for Certified Public Accountant) on his visiting card.
• Charge fees on a percentage of profits or which are contingent upon the findings, or results of such work provided that.
a. In the case of a receiver or a liquidator, the fees may be based on a percentage of the realisation or disbursement of the assets.
b. In the case of an auditor of a co-operative society the fees may be based on a percentage of the paid-up capital or the working capital etc.
c. In the case of a valuer for the purposes of direct taxes and duties, the fees may be based on a percentage of the value of the property valued.
• Engage in any business other than the profession of chartered accountants unless permitted by the Council.
• Accept position as auditor previously held by another chartered accountant without first communicating with him in writing.
• Accept any other work/assignment/service on a remuneration, which exceeds the fees payable for statutory audit of the same undertaking. (Applicable only in respect of statutory audits of public sector undertaking/Govt. Companies/Listed companies/other public companies with turnover of Rs. 50 crores or more in a year for appointments after 1st April, 2002 — Ref: Notification No. 1-CA(7)/60/2002 published in CA Journal-March, ’02 issue).
• Accept or carry out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:— (notification No.1-CA(7)/93/2006 published in CA journal on page 652 of October, ’06 issue):
28 November 2013
THE CHARTERED ACCOUNTANTS ACT AND REGULATIONS
A Chartered Accountant in practice CAN
1. Share profits of business or other similar arrangements with certain categories of non-members, to be prescribed, from time to time, in the Regulations.
2. Enter in to multi–disciplinary partnership, in or outside India, with certain categories of non-members, to be prescribed, from time to time, in the Regulations.
3. The members can use the Logo (released by the Institute on 1st July, 2007) which consists of the letters ‘CA’ and a tick mark upside down inside a rounded rectangle with white background. (members can use this Logo as per Institute’s guideline available on its website/Refer The CA Journal July, 2007).
4. Advertise through a write up setting out their particulars of their firms and services provided by them subject to the Guidelines No.1–CA(7)/council guidelines/01/2008, Dated 14th May, 2008 issued by the Council pursuant to Clause (7) of Part I of the First Schedule to the Chartered Accountants Act, 1949. (Refer The CA Journal July, 2008 for the detailed guidelines).
5. Give his name and his firms name under specified groups in telephone directory viz., Yellow Pages brought by telephone authorities.
6. Use the designation ‘C.A.’ as well as the name of the firm in greeting cards and invitation cards.
7. Be a director simpliciter in a company without permission of the Council.
8. Be a promoter director in a company without prior permission of the Council.
9. Render Management Consultancy and Other Services in Corporate form, subject to the guidelines issued by the Institute in this regard. (Decision in the 261st Council meeting. Published on page 629 of October 2006 issue of C.A. Journal).
10. Create his own website subject to overall guidelines laid down by the Council and should ensure that their websites are run on a "pull" and not "push" method.
11. The members of ICAI who are also members of AICPA and are eligible to sign the financial statements as CPAs (i.e., as members of the AICPA), may do so. So far as ethical standards are concerned, the ICAI ethical standards will apply. When the ICAI members sign the financial documents as CPAs, they should indicate in an appropriate manner, that their firm is an Indian accounting firm registered with the Institute of Chartered Accountants of India under the Chartered Accountants Act, 1949 (Decision in the 257th Council meeting. Published on page 145 of July 2006 issue of C.A. Journal).
A Chartered Accountant in practice CAN
1. Share profits of business or other similar arrangements with certain categories of non-members, to be prescribed, from time to time, in the Regulations.
2. Enter in to multi–disciplinary partnership, in or outside India, with certain categories of non-members, to be prescribed, from time to time, in the Regulations.
3. The members can use the Logo (released by the Institute on 1st July, 2007) which consists of the letters ‘CA’ and a tick mark upside down inside a rounded rectangle with white background. (members can use this Logo as per Institute’s guideline available on its website/Refer The CA Journal July, 2007).
4. Advertise through a write up setting out their particulars of their firms and services provided by them subject to the Guidelines No.1–CA(7)/council guidelines/01/2008, Dated 14th May, 2008 issued by the Council pursuant to Clause (7) of Part I of the First Schedule to the Chartered Accountants Act, 1949. (Refer The CA Journal July, 2008 for the detailed guidelines).
5. Give his name and his firms name under specified groups in telephone directory viz., Yellow Pages brought by telephone authorities.
6. Use the designation ‘C.A.’ as well as the name of the firm in greeting cards and invitation cards.
7. Be a director simpliciter in a company without permission of the Council.
8. Be a promoter director in a company without prior permission of the Council.
9. Render Management Consultancy and Other Services in Corporate form, subject to the guidelines issued by the Institute in this regard. (Decision in the 261st Council meeting. Published on page 629 of October 2006 issue of C.A. Journal).
10. Create his own website subject to overall guidelines laid down by the Council and should ensure that their websites are run on a "pull" and not "push" method.
11. The members of ICAI who are also members of AICPA and are eligible to sign the financial statements as CPAs (i.e., as members of the AICPA), may do so. So far as ethical standards are concerned, the ICAI ethical standards will apply. When the ICAI members sign the financial documents as CPAs, they should indicate in an appropriate manner, that their firm is an Indian accounting firm registered with the Institute of Chartered Accountants of India under the Chartered Accountants Act, 1949 (Decision in the 257th Council meeting. Published on page 145 of July 2006 issue of C.A. Journal).
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