Page 376 - CA Final PARAM Digital Book.

Answer (a)As per Clause (6) of Part I of the First Schedule of the Chartered Accountants Act, 1949, 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. Mr. Avi is wrong in seeking clients through family and friends. Creating a website is not a non-
compliance provided it is in line with the guidelines issued by the Institute in this regard. One of the
guidelines is that the website should not be in push mode. Further, mentioning of clients’ names is also
prohibited as per the guidelines. In the given situation, Mr. Avi shared the website address on his all social
media posts and stories and tagged 40 traders of his local community with the caption “Simple Online Stock
Certification Services” mentioning his current clients as well. This is in complete contravention of the
guidelines on the website issued by the ICAI. Thus, CA, Avi would be held guilty of professional misconduct
under clause 6 of Part 1 of First Schedule of the Chartered Accountants Act, 1949.

QNO First Schedule, Part I,Cl,2 & Cl 3 Sharing & Accepting (Advocate) Old Course – (M15R, M16E, PM17,
662.010 TITANIUM CNO – PE.1040 / PE.1080 M18M)

Mr. A is a practicing Chartered Accountant. Mr. B is a practicing Advocate representing matters in the court
of law. Mr. A and Mr. B decided to help each other in the matters involving their professional
expertise. Accordingly, Mr. A recommends Mr. B in all tax litigation matters in the court of law and

Mr. B consults Mr. A in all matters related to finance and other related matters, which comes to him in
arguing various cases in the court of law. Consequently, they started sharing some part in the profits of
their professional work.

Answer Part I -- Relevant Laws
▪ Clause (2) of Part I of First Schedule to the Chartered Accountants Act 1949

▪ Clause (3) of Part I of First Schedule to the Chartered Accountants Act 1949

Part II -- Requirements of Relevant Laws
➢ Clause (2) of Part I of First Schedule to the Chartered Accountants Act 1949
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, for
the purpose of rendering such professional services from time to time in or outside India.

➢ Clause (3) of Part I of First Schedule to the Chartered Accountants Act 1949
A Chartered Accountant in practice is deemed to be guilty of professional misconduct if he accepts
any part of the profits of the professional work of a person who is not a member of the Institute.

A practicing member of the Institute can share fees or profits arising out of his professional business
with such members of other professional bodies or with such other persons having such
qualifications as prescribed by the Council under Regulation 53-A of the Chartered Accountants
Regulations, 1988.

Part III – Case Discussion
➢ Mr. B, an advocate, a member of Bar Council, is sharing part of profits of his professional work with
Mr. A, a chartered accountant.
Part IV – Conclusion
➢ Under the said regulation, the member of “Bar Council of India” is included. Hence, Mr. A, a
practicing Chartered Accountant, will not be held guilty under any of the abovementioned clauses
for paying and accepting part of profits from Mr. B.

First Schedule, Part I, Cl 4 Partnership Outside India With Foreign Old Course – (N11R, PM17, N18M)
QNO Professional
664.000 First Schedule, Part I, Cl 7 Designation Consultant
TITANIUM CNO – PE.1180
Discuss whether the following actions by a Chartered Accountant would amount to misconduct or not:
(i) A Chartered Accountant practising in India enters into partnership with
(a) A Certified Public Accountant in New York.

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