1 / 36

Code of Ethics : Relevance in Today’s Scenario

Code of Ethics : Relevance in Today’s Scenario. Presented By Vandana Nagpal Deputy Secretary, ICAI. Code of Ethics. Essential for commanding the respect and confidence of the regulators and public at large. Code of Ethics.

amy
Download Presentation

Code of Ethics : Relevance in Today’s Scenario

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Code of Ethics : Relevance in Today’s Scenario Presented By Vandana Nagpal Deputy Secretary, ICAI

  2. Code of Ethics Essential for commanding the respect and confidence of the regulators and public at large

  3. Code of Ethics The Conduct of the Members are regulated under the Chartered Accountants Act.1949 and the regulations framed thereunder.

  4. Code of Ethics - Objective • Credibility • Professionalism • Quality of services • Confidence

  5. MISCONDUCT Unethical practices adopted by members of the Institute

  6. Professional misconduct Any act or omission specified in any of the Schedules to the Act Other misconduct Any misconduct not specified in any of the Schedules to the Act even if it does not arise out of the professional misconduct. MISCONDUCT

  7. Professional Misconduct • Members in Practice • Part I First & Second Schedules • Members in Service • Part II First Schedule • Members of the Institute generally • Part III First Schedule • Part II Second Schedule

  8. Enactments

  9. Modes of initiating action • Complaints • Information

  10. Complaint Processing Steps

  11. THE CENTRAL COUNCIL • Consisting 30 Members • 24 Elected Members • 6 Nominated by Central Government • Term : Three years • Headed by President who is elected by the Council for One year term

  12. THE COUNCIL (II) • Empowered to initiate enquiry into cases • Where it is prima facie of the opinion that the member is guilty of professional or other misconduct.

  13. DISCIPLINARY COMMITTEE • Enquiry conducted through one of the Standing Committees of the Council, namely, the Disciplinary Committee.

  14. DISCIPLINARY COMMITTEE (II) • Consists of five members • Headed by Chairman who is President of ICAI • Vice-Chairman who is Vice President of ICAI • Other three members • Out of the otherthree, one is Central Government Nominee

  15. The First Schedule • Part I of the First Schedule deals with the clauses describing professional misconduct in relation to Chartered Accountants in practice. • Part II of the First Schedule deals with the clauses describing professional misconduct in relation to Members of the Institute in Service. • Part III of the First Schedule deals with the clauses describing professional misconduct in relation to members of the Institute generally.

  16. The Second Schedule • Part I of the Second Schedule deals with the clauses describing professional misconduct in relation to Chartered Accountants in practice requiring action by High Court. • Part II of the Second Schedule deals with the clauses describing professional misconduct in relation to members of the Institute generally requiring action by High Court.

  17. Major Practical Issues • Advertisement&Solicitation • Communication with Outgoing Auditor • Compliance With Provisions of the Companies Act • Acceptance of Fees, which are contingent upon the findings • Engages in any Business or Occupation

  18. Advertisement & Solicitation (Clause 6) • Govt. Tenders/Other Tenders • DO’S • PERMITTED TO PAY A REASONABLE AMOUNT

  19. Cont’d.. • IN OTHER AREAS OPEN TO CA & OTHER PROFESSIONALS:- • PERMITED TO PAY EMD/SD AT THEIR DISCRETION. • IN NON-EXCLUSIVE AREAS PERMITED TO PAY REASONABLE AMOUNT OF EMD/SD.

  20. DONT’S • RESPOND TO ADVERTISEMENTS GENERALLY. • RESPOND TO TENDERS/CIRCULARS INVITING QUOTATIONS FOR PROFF. SERVICES RESTRICTED TO CA’S. • RESPOND TO ENQUIRIES ASKING FOR QUOTATION OF FEES.

  21. Communication with Outgoing Auditor (Clause 8) • DO’S • A statutory provision - applies to all audits. • Meaning of Communication. • Effective Communication -- RPAD only. • Proof of delivery. • Misplaced commitment to clients interest.

  22. DONT’S • Send communications to the Previous Auditor after the commencement of AUDIT. • Letters sent by Ordinary Post.

  23. Compliance With Sec. 225 of the Companies Act (Clause 9) • DO’S • Procedural requirements to be diligently adhered to. • Special notice given at least 14 days before the general meeting. • Notice to retiring auditor should be sent by regd. A.D. • Replies received from the retiring auditor sent to all the members of the company, if any.

  24. Compliance With Sec. 225 of the Companies Act (Clause 9)Cont’d.. • After satisfying that the requirement of section 225 of the companies act has been complied with, the incoming auditor should first communicate with the retiring auditor as provided in clause 8 of Part I of First Schedule.

  25. DONT’S • Relying on the verbal assurance given by the company about the compliance of sec. 225.

  26. Acceptance of Fees, which are contingent upon the findings (Clause 10) • DO’S • In case of receiver or a liquidator, the fees may be based on a percentage of the realisation of the assets. • In case of valuer for the purposes of direct taxes and duties, the fees may be based on a percentage of the value of the property valued.

  27. DONT’S • Fees in respect of any prof. work / services, based on a percentage of profits, or which are contingent upon the findings, or results of such work.

  28. Engages in any Business or Occupation(Clause 11) • DIRECTOR/PROMOTER/ PROMOTER DIRECTOR • Permitted generally to be director simplicitor in any company. • Permitted to be a promoter or signatory to the MOA & AOA of the Company. • To be a director of the company irrespective of whether the objects include areas which do not fall within the scope of the profession of CA.

  29. PERMISSION GRANTED GENERALLY • Employment under CA in practice/firm • Private tutorships. • Acting as surveyor/loss assessor under insurance act.

  30. PERMISSION GRANTED SPECIFICALLY • Full/part time employment in business concerns provided doesn’t hold substantial interest. • Full/part time employment in non- business concerns . • Office of MD/Whole Time Director of body corporate provided he/relatives doesn’t hold substantial interest. • Interest in family business concerns.

  31. SECOND Schedule • Disclosure of information by Chartered Accountant without the consent of their clients. • Expresses opinion on financial statement of business in which the Chartered Accountant, his firm/partner has substantial interest unless discloses in his reports.

  32. SECOND Schedule (2) • Failure to disclose material fact. • Failure to report a material misstatement.

  33. SECOND Schedule (3) • Gross negligence • Failure to verify securities • Failure to reconcile bank balances • Failure to check cash balances • Failure to issue false certificate regarding maintenance of records

  34. SECOND Schedule (4) • Failure to obtain sufficient information to warrant the expression of the opinion • Failure to invite attention to material departure from the generally accepted procedure of audit

  35. SECOND Schedule (5) • Failure to keep moneys of clients in a separate banking account • Opening of Bank Account Not Required • Advance received against services • Moneys recd. for expenses to be incurred with in a short period.

  36. SECOND Schedule (6) • Opening of Bank Account Required • Moneys recd. for expenses not to be incurred with in a short period. • Money received as Trustee, Executor, Liquidator etc.

More Related