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CA Intermediate · Auditing and Ethics · Ethics and Terms of Audit Engagements

CA Rohan, a practising Chartered Accountant, is asked by a client, Sundaram Foods Pvt Ltd, to give a specific audit-related certificate. Rohan's friend, who is not a CA, will actually sign and sell the certificates using Rohan's name for a fee share while Rohan does no work. Which is the most appropriate characterisation under the Chartered Accountants Act, 1949 and Code of Ethics?

This is professional misconduct. Rohan lets a non-member carry out and sign professional work using his name while he does nothing, and shares fees with that non-member. The Chartered Accountants Act prohibits both acts, and disclosing the arrangement to the client does not make it acceptable.

  1. APermissible, as long as the fee share is disclosed to the client
  2. BPermissible, because certificates are not professional work
  3. CProfessional misconduct, as Rohan permits another person not entitled to practise to carry on work in his name and shares fees with a non-memberCorrect
  4. DOnly a civil matter between the friends, with no disciplinary consequence

Explanation

A member who allows a person not being a member in practice to sign or carry on professional work in his name, and shares professional fees with a non-member (other than permitted cases), commits professional misconduct under the First Schedule to the CA Act. Disclosure to the client does not cure it.

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