The first schedule.

Where the director discipline is of the opinion that member is guilty of any
professional or other misconduct mentioned in the first schedule; he shall place the
matter before the board of discipline.
Part 1 - professional misconduct in relation to chartered accountants in practice.
Clause (1) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
allows 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.
Clause (2) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
pays or allows or agrees to pay or allow, directly or indirectly, 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
a deceased partner, or a member of any other professional body or with such other
persons having such qualification as may be prescribed, for the purpose of rendering
such professional services from time to time in or outside India.
Special Case:
In certain situations, regarding partnerships and the sale of goodwill in a proprietary
firm of chartered accountants, there are specific circumstances to consider.
When a partner passes away, their legal representative can continue to receive a share
of the firm's profits if the partnership agreement allows for it.
Additionally, in the case of a chartered accountant's proprietary firm, the goodwill can
be sold or transferred to another eligible member of the Institute after the proprietor's
death. The Council has outlined the process for such cases, particularly when the
death occurred after August, 1998. The firm's name remains intact for up to one year
from the proprietor's death, provided the sale is completed within that timeframe.
However, there should be no fee sharing between the legal representative of a single-
member firm and the purchaser of the firm's goodwill. Payments can be structured in
instalments as per the goodwill sale agreement.
If a dispute arises regarding the legal heir of the deceased proprietor after their death,
and this information reaches the Institute within a year of the death, the firm's name
will be held in abeyance until the dispute is settled, up to one year from the date of
settlement.
Clause (3) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
accepts or agrees to accept any part of the profits of the professional work of a person
who is not a member of the Institute.
Provided that nothing herein contained shall be construed as prohibiting a member
‘from entering into profit sharing or other similar arrangements, including receiving
any share commission or brokerage in the fees, with a member of such professional
body or other person having qualifications.
A member cannot share his fees with a non-member, he is also not permitted to
receive and share the fees of others except for sharing with Member of such
professional body or other person having such qualification prescribed under
Regulation 53A of the Chartered Accountants Regulations.
Also, Referral fees amongst members: It is not prohibited for a member in practice to
charge Referral Fees, being the fees obtained by a member in practice from another
member in practice in relation to referring a client to him.
Clause (4) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
enters into partnership, in or outside India, with any person other than, Chartered
Accountant in practice or such other person who is a member of any other
professional body having such qualifications as may be prescribed,
including a resident who but for his residence abroad would be entitled to be
registered as a member under section 4 or whose qualifications are recognized by the
Central Government or the Council for the purpose of permitting such partnerships.
Regulation 53A (1) and (3).
The Council has prescribed Regulation 53A (1) of the Chartered Accountants
Regulations, the professional bodies, which are as under:
• The Institute of Company Secretaries of India.
• The Institute of Cost & Works Accountants of India.
• Bar Council of India.
• The Indian Institute of Architects.
• The Institute of Actuaries of India.
Further, the Council has also prescribed Regulation 53A (3) of the Chartered
Accountants Regulations, the persons qualified in India, which are as under:
• Company Secretary.
• Cost Accountant.
• Actuary.
• Bachelor in Engineering.
• Bachelor in Technology.
• Bachelor in Architecture.
• Bachelor in Law.
• Master in Business Administration.
All degrees from a university established by law or an institution recognised by law; or
technical institutions recognised by All India Council for Technical Education.
However, the members cannot form multi-disciplinary partnerships till such time that
Regulators of such other professionals also permit partnership with chartered
accountants, and guidelines in this regard are issued by the Council.
Clause (5) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Secures either through the services of a person who is not an employee of such
Chartered Accountant or who is not his partner or by means which are not open to a
Chartered Accountant, any professional business.
Provided that nothing herein contained shall be construed as prohibiting any
agreement permitted in terms of item (2), (3) and (4) of this part.
Example: A Chartered Accountant wrote various letters to officers of different Army
Canteens giving details about him and his experience, his partner & office and the
norms for charging audit fees. He was held guilty for violation of Clauses (5) & (6).
Clause (6) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Solicits clients or professional work either directly or indirectly by circular,
advertisement, personal communication or interview or by any other means.
Provided that nothing herein contained shall be construed as preventing or
prohibiting:
• Any Chartered Accountant from applying or requesting for or inviting or securing
professional work from another chartered accountant in practice; or
• A member from responding to tenders or enquiries issued by various users of
professional services or organizations from time to time and securing
professional work as a consequence.
However, as per the guideline issued by the Council of the Institute of Chartered
Accountants of India, a member of the Institute in practice shall not respond to any
tender issued by an organization or user of professional services in areas of services
which are exclusively reserved for chartered accountants, such as audit and attestation
services.
However, such restriction shall not be applicable where minimum fee of the
assignment is prescribed in the tender document itself or where the areas are open to
other professionals along with the Chartered Accountants.
Some forms of soliciting work which the Council has prohibited are as follows:
Advertisement and note in the press:
Members should not advertise for soliciting work or advertise in a manner which could
be interpreted as soliciting or offering to undertake professional work. They are also
not permitted to use the less open method of circulating letters to a small field of
possible clients. Personal canvassing or canvassing for clients of previous employer
through the help of the employees are also not permitted. The exceptions to the
above rule are:
 • A member may request another Chartered Accountant in practice for
professional work.
• a member may advertise changes in partnerships or dissolution of a firm, or of
any change in address of practice and telephone numbers. Such announcements
should be limited to a bare statement of facts and consideration given to the
appropriateness of the area of distribution of the newspaper or magazine and
number of insertions.
• a member is also permitted to issue a classified advertisement in the journal or
newsletter of the Institute intended to give information for sharing professional
work on assignment basis or for seeking partnership or salaried employment of
an accountancy nature, provided it only contains the accountant’s name,
address or telephone number, e-mail address and address of social Networking
sites of members.
Application for empanelment for allotment of audit and other professional work:
The Government departments, government companies or Corporations, courts, co-
operative societies and banks and other similar institutions, prepare panels of
chartered accountants for allotment of audit and other professional work. Where the
existence of such a panel is within the knowledge of a member, he is free to write to
the concerned organization with a request to place his name on the panel.
However, it would not be proper for the Chartered Accountant to make roving
enquiries by applying to any such organization for having his name included in any
such panel. It is permissible to quote fees on enquiries being received from such
bodies, which maintain such panel.
Responding to Tenders, Advertisements and Circulars:
It is not prohibited to the members to respond to tenders and requests made by users
of professional work. This is however subject to conditions issued by the Council,
a member of the Institute in practice shall not respond to any tender issued by an
organization or user of professional services in areas of services which are exclusively
reserved for Chartered Accountants, such as audit and attestation services.
However, such restriction shall not be applicable where minimum fee of the
assignment is prescribed in the tender document itself or where the areas are open to
other professionals along with the Chartered Accountants.
Publication of Books, Articles or Presentation:
It is not permissible for a member to mention in a book or an article published by him,
or a presentation made by him, any professional attainment, whether of the member
or the firm of chartered accountants, with which he is associated.
However, he may indicate in a book, article or presentation the designation “Chartered
Accountant” as well as the name of the firm.
Issue of Greeting Cards or Invitations:
The Council does not approve of the issue of greeting cards or personal invitations by
members indicating their professional designation, status and qualifications etc.
However, the Council is of the view that the designation “Chartered Accountant” as
well as the name of the firm may be used in greeting cards, invitations for marriages
and religious ceremonies and any invitations for opening or inauguration of office of
the members, change in office premises and change in telephone numbers,
provided that such greeting cards or invitations etc. are sent only to clients, relatives
and friends of the members concerned
Advertisement for Silver, Golden, Platinum or Centenary celebrations:
It is not permitted to advertise the events organised by a Firm of Chartered
Accountants. However, considering the need of interpersonal socialization/relationship
of the members through such get together occasions, the advertisement for Silver,
Golden, Diamond, Platinum or Centenary celebrations of the Chartered Accountants
Firms may be published in newspaper or newsletter.
Acceptance of original professional work by a member emanating from the client
introduced to him by another member:
The Council has decided that a member should not accept the original professional
work emanating from a client introduced to him by another member. If any
professional work of such client comes to him directly, it should be his duty to ask the
client that he should come through the other member dealing generally with his
original work.
Educational Videos:
While the videos of educational nature may be uploaded on the internet by members,
no reference should be made to the Chartered Accountants Firm wherein the member
is a partner/ proprietor. Further, it should not contain any contact details or website
address.
Guidelines for Website:
• The Chartered Accountants and Firms are free to create their own website.
• The actual format of the Website is not being prescribed nor any standard
format of the Website is being given to provide independence to the Members.
• The Chartered Accountants and Firms should ensure that their websites are run
on a “pull” model and not a “push” model of the technology to ensure that any
person who wishes to locate the Chartered Accountants or Chartered
Accountants’ firms would only have access to the information and the
information should be provided only based on specific “pull” request.
• The Chartered Accountants and Firms should ensure that none of the
information contained in the Website be circulated on their own or through E-
mail or by any other mode or technique except on a specific “pull” request.
• The Chartered Accountants would also not issue any circular or any other
advertisement or any other material of any kind whatsoever by virtue of which
they solicit people to visit their website. The Chartered Accountants would,
however, be permitted to mention their website address on their professional
stationery and email.
• Display of Passport style photograph is permitted.
• The members may include articles, professional information, bulletin boards,
professional updating and other matters of larger importance or of professional
interest on the website. Educational videos on topics of professional relevance
are permissible.
• The Website should ensure adequate secrecy of the matters of the clients
handled through Website.
 • No Advertisement in the nature of banner or any other nature will be permitted
on the Website.
• The Website address should be as near as possible to the individual name or
trade name, firm name of the Chartered Accountant in practice or of firm.
Clause (7) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Advertises his professional attainments or services, or uses any designation or
expressions other than the Chartered Accountant on professional documents, visiting
cards, letter heads or sign boards unless it be a degree of a University established by
law in India or recognized by the Central Government or a title indicating membership
of the Institute of Chartered Accountants or of any other institution that has been
recognized by the Central Government or may be recognized by the Council.
Provided that a member in practice may advertise through a write up, setting out the
service provided by him or his firm and particulars of his firm subject to such
guidelines as may be issued by the Council.
This clause prohibits advertising of professional attainments or services of a member.
However, the services can be advertised in a restricted way through a write up subject
to the Guidelines as follows:
Guidelines for Write up:
• The Members may advertise through a write up setting out their particulars or
of their firms and services provided by them subject to the following Guidelines
and must be presented in such a manner as to maintain the profession’s good
reputation, dignity, and its ability to serve the public interest.
• The Member or Firm should ensure that the contents of the Write up are true to
the best of their knowledge and belief and are in conformity with these
Guidelines and be aware that the Institute of Chartered Accountants of India will
neither approve a propose write-up, nor owns any responsibility whatsoever for
such contents or claims.
The write-up shall comply with the following conditions:
• It shall be honest and truthful.
 • There shall be no exaggerated claims for the services offered by the member or
the Firm, or the qualifications or experience of the member or any of the
partners or any other person associated with the Firm.
• It must not make any disparaging references or unsubstantiated comparisons to
the work of others.
• It should not be of a nature that may bring the profession into disrepute.
• It should not contain testimonials or endorsements concerning Member or
names of clients (both the past and present) or the fees charged.
• It should not contain any information about achievements or awards (except the
awards given by the Central or State Governments or Regulatory bodies) or any
other position held, or accreditation granted by any organisation.
• Monogram of any kind or use of any kind of catch words is not permissible.
• The Membership number or firm registration number is mandatory to be
mentioned in the write up.
• It should not be of font size exceeding 14.
• It must not be violative of any provisions of Chartered Accountants Act and
regulations made there under and Code of Ethics and any Guideline of the
Council.
Other guidelines:
Insolvency Professional:
A member empanelled as Insolvency Professional or Registered Valuer can mention
“Insolvency Professional” or “Registered Valuer” respectively on his visiting card and
letter head.
Practice as Advocate:
Members of the Institute in practice who are otherwise eligible may practise as
advocates subject to the permission of the Bar Council but in such case, they should
not use designation ‘Chartered Accountant’ in respect of the matters involving the
practice as an advocate. In respect of other matters, they should use the designation
‘Chartered Accountant’ but they should not use the designation ‘Chartered
Accountant’ and ‘Advocate’ simultaneously.
Practice as Company Secretary or Cost Accountant:
Members of the Institute in practice who are otherwise eligible may also practice as
Company Secretaries, Cost Accountants. Such members shall, however, not use
designation of the aforesaid Institutes simultaneously with the designation “Chartered
Accountant”. It is clarified that in the event of the permission being granted to a
member in practice to also hold COP of sister Institute and Bar Council, such a member
be treated as a member in full-time practice.
Mention of Firm name except on Professional Documents:
It is not proper for a Firm of Chartered Accountants to use the designation ‘Chartered
Accountant’ except on professional documents, visiting cards, letter heads or sign
boards and under the circumstances clarified under Clause 6.
However, an individual member may use the prefix “CA” with his name.
Notice in the Press relating to the Success in an Examination:
Notice in the press relating to the success in an examination of an individual candidate,
should not contain any element of undesirable publicity either in relation to the
articled/audit assistant or an employee or the member or the firm with whom he was
served.
Appearance of Chartered Accountants on Electronic Media:
Members may appear on television, films and Internet and agree to broadcast in the
Radio or give lectures at forums and may give their names and describe themselves as
Chartered Accountants.
Special qualifications or specialised knowledge directly relevant to the subject matter
of the programme may also be given. Firm name may also be mentioned,
however, any exaggerated claim or any kind of comparison is not permissible. What he
may say or write must not be promotional of him or his firm but must be an objective
professional view of the topic under consideration. Publicity is permitted for
appointments to positions of local or national importance or for the views of members
on matters of similar importance. Mention of the membership of the Institute is
desirable in such cases. What should be aimed at is to achieve suitable publicity for the
Institute and its members generally. Members giving talks or lectures or attending
conference may describe themselves as Chartered Accountants only when they are
acting in their capacity as Chartered Accountants. However, reference to the
professional firm of the member should not be given.
Size of Sign Board: About the size of sign board for his office that a member can put
up, it is a matter in which the members should exercise their own discretion and good
taste while keeping in mind the appropriate visibility and illumination.
However, use of glow signs or lights on large-sized boards as is used by traders or
shop-keepers is not permissible.
A member can have a name board at the place of his residence with the designation of
a Chartered Accountant, provided it is a name plate or name board of an individual
member and not of the firm.
Public Announcements with details of Directors:
The prospectus or public announcements issued by these Companies often publish
descriptions about the Chartered Accountant’s expertise, specialisation and knowledge
in any particular field or add appellations or adjectives to their names.
In order that the inclusion of the name of a member of the Institute in the prospectus
or public announcements or other public communications issued by the Companies in
which the member is a director does not contravene the above noted provisions, it is
necessary that the members should take necessary steps to ensure that such
prospectus or public announcements or public communications do not advertise his
professional attainments and also that such prospectus or public announcements or
public communications do not directly or indirectly amount to solicitation of clients for
professional work by the member. As it is difficult to lay down a rigid rule in this
respect, the members must use their good judgement, depending upon the facts and
circumstances of each case to ensure the compliance with provisions.
It is advisable for a member that as soon as he is appointed as a director on the Board
of a Company, he should specifically invite the attention of the management of the
Company to the aforesaid provisions and should request that before any such
prospectus or public announcements or public communication mentioning the name
of the member concerned, is issued, the material pertaining to the member concerned
should, as far as practicable be got approved by him.
The use of the expression ‘Chartered Accountant’ is permissible. However, the
member must ensure that descriptions about his expertise, specialisation, and
knowledge in any field or other appellations or adjectives are not published with his
name.
About directorships held by the member in other Companies can, however, be given,
but the name of the firm of Chartered Accountants in which the member is a partner,
should not be given.
Clause (8) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
accepts a position as auditor previously held by another chartered accountant or a
certified auditor who has been issued certificate under the Restricted Certificate Rules,
without first communicating with him in writing.
Objective of this clause:
The member should get an opportunity to know the reasons for the change, in order
to be able to safeguard his own interest, the legitimate interest of the public and the
independence of the existing accountant. It is not intended, in any way, to prevent or
obstruct the change.
When making the inquiry from the retiring auditor, the one proposed to be appointed
or already appointed should primarily find out whether there are any professional or
other reasons why he should not accept the appointment.
Dispute with regards to the fees:
The existence of a dispute as regards the fees may be root cause of an auditor being
changed. This would not constitute valid professional reasons on account of which an
audit should not be accepted by the member to whom it is offered.
However, in the case of an undisputed audit fees for carrying out the statutory audit
under the Companies Act or various other statutes having not been paid, the incoming
auditor should not accept the appointment unless such fees are paid.
In respect of other dues, the incoming auditor should in appropriate circumstances use
his influence in favour of his predecessor to have the dispute as regards the fees
settled.
The professional reasons for not accepting an audit would be:
(a) Non-compliance of the provisions of Sections 139 and 140 of the Companies Act, as
mentioned in Clause (9) of the Part (1) of First Schedule; and
(b) Non-payment of undisputed Audit Fees by auditees other than in case of Sick Units
for carrying out the Statutory Audit; and
(c) Issuance of a qualified report.
In the a and b above, an auditor who accepts the audit would be guilty of professional
misconduct; and
In c above, The auditor may accept the audit if he is satisfied that the attitude of the
retiring auditor was not proper and justified.
If, on the other hand, he feels that the retiring auditor had qualified the report for
good and valid reasons, he should refuse to accept the audit.
Payment of disputed fees:
Where the previous auditor is not available for accepting payment of undisputed audit
fees, and it is not otherwise possible to transfer the payment to him electronically, the
incoming auditor may advise the client to purchase demand draft of the amount
equivalent to undisputed audit fees of retiring auditor, and may accept the audit
assignment after verifying the same. It will be the duty of the incoming auditor to
ensure the payment of undisputed audit fees of the retiring auditor at the earliest.
Procedure to adopt when a prospective client tells you that he wants to change his
auditor and wants you to take up his work?
The auditor should ask the company, whether the retiring auditor had been informed
of the intention to change?
If the answer is in the affirmative, then a communication should be addressed to the
retiring auditor.
If, however, it is learnt that the old auditor has not been informed, and the client is not
willing to inform, it would be necessary to ask the reason for the proposed change.
If there is no valid reason for a change, it would be healthy practice not to accept the
audit. If he decides to accept the audit, he should address a communication to the
retiring auditor.
Objective the auditor under this clause:
Communicating with the retiring auditor as to ascertain from him, whether there are
any circumstances which warrant him not to accept the appointment. But sometimes,
the retiring auditor fails without justifiable cause, not for any good reason, but simply
because they feel hurt due to the change. To avoid any deadlock, the new auditor can
take action after waiting for a reasonable amount of time for a response.
Communication with a retiring auditor.
The Council has a specific viewpoint regarding communication with a retiring auditor.
They believe that merely sending a letter "under certificate of posting" is not enough
to establish communication unless there is evidence that the letter reached the
intended recipient. Chartered Accountants who rely solely on such posted letters do so
at their own risk.
The court's perspective on this matter is also noteworthy. They assert that obtaining a
certificate of posting does not meet the requirements outlined in Clause (8) of
Schedule I. According to the court, the presumption under Section 114 of the Evidence
Act, which suggests that a letter eventually reaches the addressee, cannot replace the
need for concrete proof of delivery to the addressee. Therefore, the term "in
communication with" implies that there should be clear evidence that the
communication from the incoming auditor reached the retiring auditor.
To ensure proper communication, the Council suggests the following methods that
can provide positive evidence of delivery:
(a) Sending a letter via "Registered Acknowledgment Due,"
(b) Obtaining a written acknowledgement by hand,
(c) Receiving an acknowledgement from the retiring auditor through their registered
email address with the Institute or their last known official email address,
(d) Using a Unique Identification Number (UDIN) generated on the UDIN portal,
subject to additional guidelines issued by the Council.
Clause (9) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
accepts an appointment as auditor of a Company without first ascertaining from it
whether the requirements of Sections 139 (Appointment of the auditor), and 140
(Procedure to change the auditor) of the Companies Act, in respect of such
appointment have been duly complied with.
Under this clause it is obligatory on the incoming auditor to ascertain from the
Company that the appropriate procedure in the matter of his appointment has been
duly complied with so that no shareholder or retiring auditor may, at a later date,
challenge the validity of such appointment.
If the incoming auditor is satisfied that the Company has complied with the provisions
of Sections 139 and 140 of the Companies Act, he should first communicate with the
outgoing auditor in writing as provided in Clause (8) of Part (1) of the First Schedule,
before accepting the audit assignment.
Procedure for appointment of auditor other than the retiring auditor and for
removal of existing auditor:
a. Member's Special Notice:
If a member of the company wants to change the auditor or remove the existing
one, they must provide a "special notice" under Section 140(4) of the
Companies Act, for discussion at the Annual General Meeting.
b. Special Notice for Auditor Removal:
This special notice is also necessary if a member intends to remove the auditor
before their term ends. This notice must be given before the date of the AGM
where the appointment or reappointment of the auditor is to be discussed.
c. Notification to Retiring Auditor:
Upon receiving the special notice, the company must promptly send a copy of it
to the retiring auditor, as required by Section 140(4) of the Companies Act.
d. Notification to Members:
The company is also obliged to send the special notice to all its members at
least seven days before the AGM. This complies with the provisions of Section
 115 and Section 20 of the Companies Act, which outline various methods for
delivering documents to the company or its officers.
e. Retiring Auditor's Representation:
The retiring auditor, upon receiving the special notice, can provide a
representation to the members of the company. This representation should be
sent to the members as required under Section 140(4) of the Companies Act.
f. General Meeting Consideration:
The representation received from the retiring auditor must be considered at the
General Meeting before any resolution proposed by a member can be passed.
This resolution must adhere to the provisions of Section 114 of the Companies
Act.
g. Role of Incoming Auditor:
The incoming auditor has a significant responsibility. They need to ensure that
the company has followed the procedures laid out in Sections 139 and 140 of
the Companies Act,
"Ascertaining" means finding out for certain, so the incoming auditor must
verify the relevant records of the company to ensure that it has indeed
complied with these provisions.
It is not enough for the incoming auditor to rely solely on a certificate from the
company's management. They need to independently verify the relevant
records.
If the company does not allow the incoming auditor to verify these records to ensure
compliance with Sections 139 and 140, the incoming auditor should decline the audit
assignment.
Guidance on the specific records that an incoming auditor should verify when
assessing the appointment or reappointment of auditors.
a. Appointment After Incorporation:
If the auditor is being appointed for the first time after the company's
incorporation, the incoming auditor should check whether the Board of
 Directors passed a resolution for this appointment within thirty days of the
company's registration.
b. Appointment by General Meeting:
If the first auditor is not appointed by the Board rather in a general meeting of
the company, the incoming auditor should verify if the company issued a proper
notice for the general meeting and if the resolution was validly passed during
the meeting.
c. Filling Casual Vacancy:
When the appointment aims to fill a casual vacancy, the incoming auditor
should verify whether the Board of Directors has the authority to do so and if
they passed a resolution to fill the vacancy.
d. Vacancy Due to Auditor Resignation:
In cases where a vacancy arises due to the resignation of the auditor, the
incoming auditor should confirm whether a proper resolution to fill the vacancy
was passed at the General Meeting of the company.
e. Vacancy Due to Auditor Removal:
If the vacancy results from the removal of the auditor before the end of their
term, the incoming auditor should ensure that a special resolution was passed
at the General Meeting of the company, and that the prior approval of the
Central Government was obtained.
f. Appointment of Auditor Other Than Retiring Auditor:
In situations where an auditor other than the retiring auditor is proposed to be
appointed, the incoming auditor should ascertain whether the company
complied with the provisions of Sections 139 and 140 of the Companies Act,
These provisions apply equally when an auditor jointly holds office with another
auditor, and one or more of the joint auditors has not been reappointed.
Ascertaining whether the Company has complied with the provisions of Section 140
that id provision relating to the special notice, the incoming auditor should verify the
following matters:
 a. Whether a member of the Company has given special notice of the resolution as
required under Section 140 (4) of the Companies Act, the notice shall be sent by
members to the company not earlier than three months but at least fourteen
days before the date of the meeting at which the resolution is to be moved,
exclusive of the day on which the notice is given and the day of the meeting. A
true copy of this notice should be obtained by the incoming auditor.
b. Whether this special notice has been sent to all the members, at least 7 days
before the date of the General Meeting.
c. Whether this special notice has been sent to the retiring auditor forthwith as
required under Section 140(4).
d. Whether the representation received from the retiring auditor has been sent to
the members of the Company as required under Section 140(4).
e. Whether the representation received from the retiring auditor has been
considered at the general meeting and the resolution proposed by the special
notice has been properly passed at the general meeting.
Section 140. Removal, resignation of auditor and giving of special notice.
• Subsection (1):
- Removal of Auditor: An auditor appointed under section 139 can only be
removed by a special resolution of the company.
- Central Government Approval: Such removal requires prior approval from
the Central Government in the prescribed manner.
- Opportunity to be Heard: Before taking any action, the auditor must be
given a reasonable opportunity to be heard.
• Subsection (2):
- Resigned Auditor's Statement: If an auditor resigns from the company,
they must submit a statement in the prescribed form to the company and
the Registrar within 30 days of resignation.
- Comptroller and Auditor-General, (CAG): In certain cases specified in
section 139(5), the auditor must also file the statement with the
Comptroller and Auditor-General of India.
 - Statement Contents: The statement should indicate the reasons and other
relevant facts concerning the resignation.
• Subsection (3):
- Penalties for Non-compliance: If the auditor does not comply with the
provisions of subsection (2), they may face penalties.
- Penalty Amount: The penalty can be up to fifty thousand rupees or an
amount equal to the auditor's remuneration, whichever is less.
- Continuing Failure Penalty: For continued non-compliance, a further
penalty of five hundred rupees per day may apply, with a maximum limit
of two lakh rupees.
• Subsection (4):
- Special Notice for Auditor Appointment: A special notice is required for a
resolution at an annual general meeting appointing a person other than
the retiring auditor.
- Retiring Auditor Notification: If such a notice is received, the company
must send a copy to the retiring auditor.
- Retiring Auditor's Representation: If the retiring auditor makes a written
representation regarding the resolution, the company must:
- Mention this representation in the notice to members.
- Send a copy of the representation to all members.
- Oral Presentation: The retiring auditor may request the representation to
be read out at the meeting if not sent or received too late.
- Registrar's Copy: If the representation is not sent, a copy must be filed
with the Registrar.
- Tribunal Intervention: The Tribunal may prevent sending the
representation and reading it out if it believes this right is being abused.
• Subsection (5):
- Tribunal's Authority: The Tribunal can, either on its own or upon
application by the Central Government or an aggrieved person, take
 action if it finds the auditor acted fraudulently or abetted fraud related to
the company, its directors, or officers.
- Change of Auditor: The Tribunal can order the company to change its
auditors.
- Central Government's Role: If the Central Government initiates the
application and the Tribunal finds a change is necessary, it should make an
order for the auditor not to function. The Central Government can
appoint a new auditor.
- Auditor's Disqualification: An auditor against whom a final order is passed
by the Tribunal under this section is disqualified from being appointed as
an auditor of any company for five years.
- Liability for Action: Auditors found liable may also be subject to action
under section 447.
Clause (10) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Charges or offers to charge, accepts or offers to accept in respect of any professional
employment fees which are based on a percentage of profits or which are contingent
upon the findings, or results of such employment, except as permitted under any
regulations made under this Act.
Regulation 192, which exempts members from the operation of this clause in certain
professional services.
Restriction on fees: No Chartered Accountant in practice shall charge or offer to
charge, accept or offer to accept, in respect of any professional work, fees which are
based 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 realization 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 or the gross or net
income or profits;
 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 property valued;
d. in the case of certain management consultancy services as may be decided by
the resolution of the Council from time to time, the fees may be based on
percentage basis which may be contingent upon the findings, or results of such
work;
e. in the case of certain fund-raising services, the fees may be based on a
percentage of the fund raised;
f. in the case of debt recovery services, the fees may be based on a percentage of
the debt recovered;
g. in the case of services related to cost optimisation, the fees may be based on a
percentage of the benefit derived; and
h. any other service or audit as may be decided by the Council
i. Acting as Insolvency Professional;
j. Non-Assurance Services to Non-Audit Clients.
Clause (11) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Engages in any business or occupation other than the profession of chartered
accountant unless permitted by the Council so to engage. Provided that nothing
contained herein shall disentitle a chartered accountant from being a director of a
company (Not being managing director or a whole-time director) unless he or any of
his partners is interested in such company as an auditor.
Activities with which a member in practice can associate himself with or without the
permission of the Council.
Regulation 190A:
Chartered Accountant in practice not to engage in any other business or occupation.
“A chartered accountant in practice not to engage in any other business or occupation
other than the profession of accountancy except with the permission granted in
accordance with a resolution of the Council”.
Regulation 191:
Part-time employment a Chartered Accountant in practice may accept.
“Notwithstanding anything contained in Regulation 190A but subject to the control of
the Council, a Chartered Accountant in practice may act as a liquidator, trustee,
executor, administrator, arbitrator, receiver, adviser or representative for costing,
financial or taxation matter, or may take up an appointment that may be made by the
Central Government or a State Government or a court of law or any other legal
authority or may act as a Secretary in his professional capacity, provided his
employment is not on a salary-cum-full-time basis”.
Permission granted generally:
Members of the Institute in practice be generally permitted to engage in the following
categories of occupations, for which no specific permission from the Council would be
necessary in individual cases:
• Employment under Chartered Accountants in practice or firms of such chartered
accountants.
• Private tutorship.
• Authorship of books and articles.
• Holding of Life Insurance Agency License for the limited purpose of getting
renewal commission.
• Attending classes and appearing for any examination.
• Holding of public elective offices such as MP, MLA, and MLC.
• Honorary office leadership of charitable-educational or other non-commercial
organisations
• Acting as Notary Public, Justice of the Peace, Special Executive Magistrate and
the like.
• Part-time tutorship under the coaching organisation of the Institute.
• Valuation of papers, acting as paper-setter, head-examiner or a moderator, for
any examination.
• Editorship of professional journals.
• Acting as Surveyor and Loss Assessor under the Insurance Act.
• Acting as recovery consultant in the banking sector
 • Owning agricultural land and carrying out agricultural activity.
Specific Resolution:
Members of the Institute in practice may engage in the following categories of
business or occupations, after obtaining the specific and prior approval of the Council
in each case:
• Full-time or part-time employment in business concerns provided that the
member, his relatives do not hold “substantial interest” in such concerns.
• Full-time or part-time employment in non-business concern.
• Office of managing director or a whole-time director of a body corporate within
the meaning of the Companies Act, , provided that the member, his relatives do
not hold substantial interest in such concern.
• Interest in family business concerns including such interest devolving on the
members as a result of inheritance or succession or partition of the family
business or concerns in which interest has been acquired as a result of
relationships and in the management of which no active part is taken.
• Interest in an educational institution.
• Part-time or full-time lectureship for courses other than those relating to the
Institute’s examinations conducted under the auspices of the Institute or the
Regional councils or their branches.
• Part-time or full-time tutorship under any educational institution other than the
coaching organization of the Institute.
• Editorship of journals other than professional journals.
• Any other business or occupation for which the Executive Committee considers
that permission may be granted.
• However, it is open to the Council to refuse permission in individual cases
though covered under any of the above categories.
Clause (11) of Part (1) of first schedule: A Chartered Accountant in practice is deemed
to be guilty of professional misconduct if he:
Allows a person not being a member of the institute in practice or a member not being
his partner to sign on his behalf or on behalf of his firm, any balance sheet, profit and
loss account, report or financial statements.
Also, as per Section 26 of the Chartered Accountants Act, 1949 which stipulates that
‘No person other than a member of the Institute shall sign any document on behalf of
a Chartered Accountant in practice or a firm of Chartered Accountants in his or its
professional capacity’.
The Council has clarified that the power to sign routine documents on which a
professional opinion or authentication is not required to be expressed may be
delegated in the following instances and such delegation will not attract provisions
of this clause:
• Issue of audit queries during the course of audit.
• Asking for information or issue of questionnaire.
• Letter forwarding draft observations/financial statements.
• Initiating and stamping of vouchers and of schedules prepared for the purpose
of audit.
• Acknowledging and carrying on routine correspondence with clients.
• Issue of memorandum of cash verification and other physical verification or
recording the results thereof in the books of the clients.
• Issuing acknowledgements for records produced.
• Raising of bills and issuing acknowledgements for money receipts.
• Attending to routine matters in tax practice, subject to provisions of Section 288
of Income Tax Act.

Part 2 - Professional misconduct in relation to members of the Institute in service.

Clause (1) of Part (2) of first schedule: A member of the Institute (other than a
member in practice) shall be deemed to be guilty of professional misconduct, if he
being an employee of any company, firm, or person:
pays or allows or agrees to pay directly or indirectly to any person any share in the
emoluments of the employment undertaken by him.
A member of the Institute in service is deemed to be guilty of professional misconduct,
if he is an employee of any company, firm, or person and during that course whatever
emoluments he receives, if he either pays or allows to pay or agree to pay any part or
share thereof whether directly or indirectly. However, this clause dose not restricts
such sharing or commitments among relatives, dependents, friends etc., if there is no
relationship in procuring or retaining the job and payment is not a consideration for
job procurement or retainership.
Clause (2) of Part (2) of first schedule: A member of the Institute (other than a
member in practice) shall be deemed to be guilty of professional misconduct, if he
being an employee of any company, firm, or person:
accepts or agrees to accept any part of fees, profits or gains from a lawyer, a chartered
accountant or broker engaged by such company, firm or person or agent or customer
of such company, firm, or person by way of commission or gratification.
This clause restricts to accept or agrees to accept any part of fee, profits or gains from
a lawyer, a chartered accountant or broker engaged by such company, firm or person
or agent or customer of such company, firm, or person by way of commission or
gratification. The objective is that when a member is in employment, he must maintain
high level of ethics and should not accept any other amount from anyone for which he
is not entitled from employer under contractual agreement of service.

Part 3 - Professional misconduct in relation to members of the Institute generally.

Clause (1) of Part (3) of first schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of professional misconduct, if he:
not being a fellow of the Institute, acts as a fellow of the Institute.
Clause (2) of Part (3) of first schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of professional misconduct, if he:
does not supply the information called for, or does not comply with the requirements
asked for, by the Institute, Council or any of its Committees, Director (Discipline),
Board of Discipline, Disciplinary Committee, Quality Review Board or the Appellate
Authority.
Clause (3) of Part (3) of first schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of professional misconduct, if he:
while inviting professional work from another chartered accountant or while
responding to tenders or enquiries or while advertising through a write up, or anything
as provided for in items (6) and (7) of Part I of this Schedule, gives information
knowing it to be false.

Part 4- Other misconduct in relation to members of the Institute generally.

Clause (1) of Part (4) of first schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of other misconduct, if he:
is held guilty by any civil or criminal court for an offence which is punishable with
imprisonment for a term not exceeding six months.
Clause (2) of Part (4) of first schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of other misconduct, if he:
in the opinion of the Council, brings disrepute to the profession or the Institute as a
result of his action whether or not related to his professional work.
The important point to note is that if imprisonment tenure exceeds six months, this
case will be covered in the Clause of Part 3 of Second Schedule.

The second schedule

Where the Director (Discipline) is of the opinion that a member is guilty of any
professional or other misconduct mentioned in the second schedule or in both the
Schedule, he shall place the matter before the Disciplinary Committee.
Part 1 - Professional Misconduct in relation to Chartered Accountants in Practice.
Clause (1) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Discloses Information acquired in the course of his professional engagement to any
person other than his client so engaging him without the consent of his client or
otherwise than as required by any law for the time being in force.
If disclosure is required as a part of performance of professional duty by a practicing
member in relation to a client, the fact that such performance is required by the client
would itself amount to the client consenting to such disclosure. Thus, a member in
practice submitting information to, say, exchange control authorities, while performing
his professional duties cannot be considered to have made disclosure without the
aforesaid consent.
Refer SA 230, Audit Documentation on the access to audit working papers.
Clause (2) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Certifies or submits in his name or in the name of his firm, a report of an examination
of financial statements unless the examination of such statements and the related
records has been made by him or by a partner or an employee in his firm or by
another chartered accountant in practice.
It has been introduced to ensure that the work entrusted to him has been carried out
by the member either directly or under his supervision before he renders his report.
An exception however has been made in respect of an examination carried out by
another chartered accountant in practice. This enables two or more members to
accept a joint assignment or enables a member also to carry out the examination of
financial statements by or with the assistance of all or either any chartered accountant
in practice.
Refer SA 299, Joint Audit of Financial Statements.
Clause (3) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Permits his name or the name of his firm to be used in connection with an estimate of
earnings contingent upon future transactions in manner which may lead to the belief
that he vouches for the accuracy of the forecast.
a chartered accountant can participate in the preparation of profit or financial
forecasts and can review them, provided he indicates clearly in his report the sources
of information, the basis of forecasts and also the major assumptions made in arriving
at the forecasts and so long as he does not vouch for the accuracy of the forecasts.
Clause (4) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Expresses his opinion on financial statements of any business or enterprise in which
he, his firm, or a partner in his firm has a substantial interest.
Clause (5) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
fails to disclose a material fact known to him which is not disclosed in a financial
statement, but disclosure of which is necessary in making such financial statement
where he is concerned with that financial statement in a professional capacity.
Clause (6) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Fails to report a material misstatement known to him to appear in a financial
statement with which he is concerned in a professional capacity.
Clause (7) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
does not exercise due diligence, or is grossly negligent in the conduct of his
professional duties.
Clause (8) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
Fails to obtain sufficient information which is necessary for expression of an opinion or
its exceptions are sufficiently material to negate the expression of an opinion.
Clause (9) of Part (1) of Second schedule: A Chartered Accountant 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.
Clause (10) of Part (1) of Second schedule: A Chartered Accountant in practice shall be
deemed to be guilty of professional misconduct, if he:
fails to keep moneys of his client other than fees or remuneration or money meant to
be expended in a separate banking account or to use such moneys for purposes for
which they are intended within a reasonable time.

Part 2 - Professional misconduct in relation to members of the Institute generally.

Clause (1) of Part (2) of Second schedule: A member of the Institute, whether in
practice or not, shall be deemed to be guilty of professional misconduct, if he:
contravenes any of the provisions of this Act or the regulations made there under or
any guidelines issued by the Council.
Clause (2) of Part (2) of Second schedule: A member of the Institute, whether in
practice or not, shall be deemed to be guilty of professional misconduct, if he:
being an employee of any company, firm or person, discloses confidential information
acquired in the course of his employment except as and when required by any law for
the time being in force or except as permitted by the employer.
Clause (3) of Part (2) of Second schedule: A member of the Institute, whether in
practice or not, shall be deemed to be guilty of professional misconduct, if he:
Includes in any information, statement, return or form to be submitted to the Institute,
Council or any of its Committees, Director (Discipline), Board of Discipline. Disciplinary
Committee, Quality Review Board or the Appellate Authority any particulars knowing
them to be false.
Clause (4) of Part (2) of Second schedule: A member of the Institute, whether in
practice or not, shall be deemed to be guilty of professional misconduct, if he:
Defalcates or embezzles money received in his professional capacity.

Part 3: Other misconduct in relation to members of the Institute generally.

Clause of Part (3) of Second schedule: A member of the Institute, whether in practice
or not, shall be deemed to be guilty of other misconduct, if he is held guilty by any civil
or criminal court for an offence which is punishable with imprisonment for a term
exceeding six months.
Imprisonment awarded for a term exceeding six months in any civil or criminal matter
treated as a major offence under ‘other misconduct’ is included in this Schedule.
Non-Compliance with Laws and Regulations (Noclar).
In the course of providing a professional service to a client or carrying out professional
activities for an employer, a Professional accountant may come across an instance of
non-compliance with laws and regulations (Noclar) or suspected Noclar committed or
about to be committed by the client or the employer, or by those charged with
governance, management or employees of the client or employer.
Non-compliance with laws and regulations (“non-compliance”) comprises of acts of
omission or commission, intentional or unintentional, which are contrary to the
prevailing laws or regulations committed by:
• a client/professional accountant’s employing organisation;
• those charged with governance of a client or employing organisation;
• management of a client/ employing organisation; or
• other individuals working for or under the direction of a client/ employing
organisation.
However, Noclar under Revised Code of Ethics does not address the personal
misconduct unrelated to the business activities of the client/ employing organisation
and non-compliance by parties other than listed out in the definition of Noclar.
The objective of Noclar is that - turning a blind eye to potential Noclar is not an
appropriate response from professional accountants, while placing renewed emphasis
on the roles of management and those charged with governance in addressing the
matter. Further, it increases awareness and understanding among Professional
accountant of their legal and regulatory responsibilities when they face Noclar.
Some important facts about NOCLAR are given below:
 • During Course of Providing a Service: Noclar will be applicable if a professional
accountant encounters, or is made aware of, non-compliance or suspected non-
compliance in the course of providing a professional service to a client. He is not
required to investigate, nor responsible for ensuring compete compliance.
• Expertise of Laws not Required: A professional accountant is expected to apply
knowledge and expertise, and exercise professional judgment. However, he is
not expected to have a level of knowledge of laws and regulations greater than
that which is required to undertake the engagement. Whether an act
constitutes non-compliance is ultimately a matter to be determined by a court
or other appropriate adjudicative body.
• Certain Matters Expressly out of Purview: Matters that are clearly
inconsequential, or relating to personal misconduct pertaining to business
activities of the client not covered.
• Disclosure, which is Contrary to Law not Required: As per IESBA Code, disclosure
of the matter to an appropriate authority would be precluded if doing so would
be contrary to law or regulation.
Documentation Requirements in NOCLAR:
• Revised Code over and above require the professional accountant to follow the
additional documents requirements as under:
• How management / those charged with governance have responded to the
matter.
• The course of action the accountant considered, the judgments made and the
decisions that were taken, having regard to the reasonable and informed third
party test.
• How the accountant is satisfied that the responsibility of public interest has
been fulfilled.
• This documentation is in addition to complying with the documentation
requirements under applicable auditing standards. SA, for example, require a
professional accountant performing an audit of financial statements to:
 • Prepare documentation sufficient to enable an understanding of significant
matters arising during the audit, the conclusions reached, and significant
professional judgments made in reaching those conclusions;
• Document discussions of significant matters with management, those charged
with governance, and others, including the nature of the significant matters
discussed and when and with whom the discussions took place; and
• Document identified or suspected non-compliance, and the results of discussion
with management and, where applicable, those charged with governance and
other parties outside the entity.
Section 6 of the Chartered Accountants Act, 1949 provides that:
No member of the Institute shall be entitled to practise whether in India or elsewhere
unless he has obtained from the Council a certificate of practice:
Every such member shall pay such annual fee for his certificate as may be determined,
by notification, by the Council.
The certificate of practice obtained under sub-section (1) may be cancelled by the
Council under such circumstances as may be prescribed.
Section 2(2), Members deemed to in practice.
Every member of the Institute is entitled to designate himself as a Chartered
Accountant. There are two classes of members, those who are in practice and those
who are otherwise occupied. In Section 2(2) of the Act, the term deemed “to be in
practice” has been defined as follows:
“A member of the Institute shall be deemed “to be in practice” when individually or in
partnership with Chartered Accountants in practice, or in partnership with members of
such other recognised professions as may be prescribed, he, in consideration of
remuneration received or to be received
engages himself in the practice of accountancy; or
offers to perform or performs service involving the auditing or verification of financial
transactions, books, accounts or records, or the preparation, verification or
certification of financial accounting and related statements or holds himself out to the
public as an accountant; or
renders professional services or assistance in or about matters of principle or detail
relating to accounting procedure or the recording, presentation or certification of
financial facts or data; or
renders such other services as, in the opinion of the Council, are or may be rendered
by a Chartered Accountant in practice;
Pursuant to, such other services, the Council has passed a resolution permitting a
Chartered Accountant in practice to render entire range of Management Consultancy
and other Services.
The expression Management Consultancy and other Services shall not include the
function of statutory or periodical audit, tax (both direct taxes and indirect taxes)
representation or advice concerning tax matters or acting as liquidator, trustee,
executor, administrator, arbitrator, or receiver, but shall include the following-
• Preparing project reports and feasibility studies.
• Budgeting including capital budgets and revenue budgets.
• Market research and demand studies.
• Personnel recruitment and selection.
• Valuation of shares and business and advice regarding amalgamation, merger
and
acquisition. Acting as Registered Valuer.
• Business Policy, corporate planning, organisation development, growth and
diversification.
• Organisation structure and behaviour, development of human resources
including design
and conduct of training programmes, work study, job-description, job evaluation
and
evaluation of workloads.
• Acting as advisor or consultant to an issue, including such matters as:
• Drafting of prospectus and memorandum containing salient futures of
prospectus. Drafting
 • and filing of listing agreement and completing formalities with Stock Exchanges,
Registrar
• of Companies and SEBI.
• Preparation of publicity budget, advice regarding arrangements for selection of
(i) ad media, (ii) centres for holding conferences of brokers, investors, etc., (iii)
bankers to issue, (iv) collection centres, (v) brokers to issue, (vi) underwriters
and the underwriting arrangement, distribution of publicity and issue material
including application form, prospectus and brochure and deciding on the
quantum of issue material (In doing so, the relevant provisions of the Code of
Ethics must be kept in mind).
• Advice regarding selection of various agencies connected with issue, namely
Registrars to
• Issue, printers and advertising agencies.
• Advice on the post issue activities, e.g., follow up steps which include listing of
instruments
• and dispatch of certificates and refunds, with the various agencies connected
with the
• work.
• Explanation - For removal of doubts, it is hereby clarified that the activities of
broking,
underwriting and portfolio management are not permitted.
• Acting as registrar to an issue and for transfer of shares/other securities.
• Acting as Insolvency Professional in terms of Insolvency and Bankruptcy Code,
2016.
Maintenance of Branch Offices.
• Section 27 of the Act, if a Chartered Accountant in practice or a Firm of
Chartered Accountants has more than one office in India, each one of such
offices should be in the separate charge of a member of the Institute.
 • Failure on the part of a member or a firm to have a member in charge of its
branch and a separate member in case of each of the branches, where there is
more than one, would constitute professional misconduct.
• However, exemption has been given to members practicing in hill areas subject
to certain conditions. The conditions are:
- Such members/firm be allowed to open temporary offices in a city in the
plains for a limited period not exceeding 3 months in a year.
- The regular office need not be closed during this period and all
correspondence can continue to be made at the regular office.
- The name board of the firm in the temporary office should not be
displayed at times other than the period such office is permitted to
function as above.
- The temporary office should not be mentioned in the letterheads, visiting
cards or any other documents as a place of business of the member/firm.
- Before commencement of every winter it shall be obligatory on the
member/firm to inform the Institute that he/it is opening the temporary
office from a particular date and after the office is closed at the expiry of
the period of permission, an intimation to that effect should also be sent
to the office of the Institute by registered post.
Above conditions apply to any additional office situated at a place beyond 50 kms from
the municipal limits in which any office is situated.
• However, a member can be in-charge of two offices if they are located in one
and the same Accommodation. In this context some of the Council’s decisions
are as follows:
- With regard to the use of the name-board, there will be no bar to the
putting up of a nameboard in the place of residence of a member with the
designation of Chartered Accountant, provided it is a name-plate or a
name-board of an individual member and not of the firm.
 • The exemption may be granted to a member or a firm of Chartered Accountants
in practice to have a second office without such second office being under the
separate charge of a member of the Institute, provided:
- the second office is located in the same premises, in which the first office
is located or,
- the second office is located in the same city, in which the first office is
located or,
- the second office is located within a distance of 50 km. from the
municipal limits of a city, in which the first office is located.
A member having two offices of the type referred to above shall have to declare, which
of the two offices is his main office, which would constitute his professional address.