Page 387 - CA Final PARAM Digital Book.

representation to be circulated among the members of the company and to be read out at the
meeting. However, the content of letter should be set out in a dignified manner how he has been
acting independently and conscientiously through the term of his office and may, in addition,
indicate, if he so chooses, his willingness to continue as auditor, if re- appointed by the shareholders.

Part III – Case Discussion
➢ CA. Anoop submitted a representation in writing to the company with a request to circulate to the
members. In the detailed representation, CA. Anoop included the contributions made by him in
strengthening the control procedures of the company during his association with the company and
also indicated his willingness to continue as an auditor if reappointed by the shareholders of the
company.

Part IV – Conclusion
➢ The proposition of the auditor to highlight contributions made by him in strengthening the control
procedures in the representation should not be included in such representations because the
representation letter should not be prepared in a manner so as to seek publicity.

➢ Thus, highlighting contributions made by him in strengthening the control procedures, while
submitting representation U/S 140(4)(iii) of the Companies Act 2013, would amount to canvassing
or soliciting for his continuance as auditor. Therefore, CA. Anoop will be held guilty for professional
misconduct under Clause (6) of Part I of First Schedule to the Chartered Accountants Act, 1949.

First Schedule, Part I,Cl,6 --Clarification (Roving Inquiry) Old Course – (M11E, PM17, M17M, N17E,
QNO TITANIUM CNO – PE.1140 M21E, N23M)
677.000

A CA firm M/s GST & Associates has sent a letter to the Goods and Service Tax Council stating that the
firm has 2 partner who specialize in the law of Goods and Service Tax and asked the said Council to
include their name in the panel, whenever formed, for providing advisory and audit services for Goods

and Service Tax. Comment with reference to the Chartered Accountants Act, 1949
Answer Part I -- Relevant Laws
▪ Clause (6) of Part I of First Schedule to the Chartered Accountants Act, 1949

Part II -- Requirements of Relevant Laws
➢ A Chartered Accountant in practice shall be deemed to be guilty of misconduct if he solicits clients
or professional work either directly or indirectly by a circular, advertisement, personal
communication or interview or by any other means. Such a restraint has been put so that the
members maintain their independence of judgement and may be able to command respect from
their prospective clients.

In case of making an application for the empanelment for the allotment of audit and other
professional work, the Council has opined that, “where the existence of such a panel is within the
knowledge of the 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 member to make roving inquiries
by applying to any such organization for having his name included in any such panel.”

Part III – Case Discussion
➢ In the given case, a CA firm M/s GST & Associates, has sent a letter to the Goods and Service Tax
Council and asked the said Council to include their name in the panel, whenever formed, for
providing advisory and audit services for Goods and Service Tax

Part IV – Conclusion
➢ Accordingly, CA. Firm M/s GST & Associates and its partners are guilty of misconduct under Clause
(6) of Part I of the First Schedule to the Chartered Accountants Act, 1949 as it has solicited
professional work from the Goods and Service Tax Council, by inquiring about the maintenance of
the panel and advertising about 2 partners in the firm having specialized knowledge of GST Law.
Author’s Note
o There are

o 12 clarifications of Clause 6 of Part I of First Schedule to the Chartered Accountants Act,
1949

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