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CA Final · Financial Reporting · Professional and Ethical Duty of a Chartered Accountant

CA Firm Nair & Co. is planning an advertisement. Partner CA Latha Nair is unsure whether a proposed claim, 'fastest GST refunds guaranteed in India', conforms to the Advertisement Guidelines. The firm's marketing head says that, since the Institute has to approve all advertisements, the Institute will bear responsibility for the claim. Which statement is consistent with the Code of Ethics (13th edition)?

The accountant is responsible for ensuring that the advertisement is true to the best of his knowledge and belief and conforms to the Advertisement Guidelines. The Institute owns no responsibility for the claims, and when in doubt the accountant is encouraged, not required, to consult the Ethical Standards Board.

  1. AThe Institute shares responsibility for the contents once the advertisement is published
  2. BThe accountant must ensure the contents are true to the best of his knowledge and belief and conform to the Guidelines; the Institute owns no responsibility for the claims, and the accountant is encouraged to consult the Ethical Standards Board if in doubtCorrect
  3. CThe accountant need only ensure conformity with the Guidelines and truth is not required
  4. DThe accountant must obtain written approval from the Ethical Standards Board before every advertisement

Explanation

The Code requires truth to the best of the accountant's knowledge and belief and conformity with the Guidelines. It states that the Institute does not own any responsibility for the contents or claims. If in doubt, the accountant is encouraged, not obliged, to consult the Ethical Standards Board. So mandatory prior approval is wrong, and so is Institute responsibility.

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