Page 390 - CA Final PARAM Digital Book.
P. 390
➢ Clarification by ICAI
Further, some forms of the soliciting work which the Council has prohibited include 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.
Part III – Case Discussion
➢ In the given case, CA Old introduced his friend CA. Young to his friend and client Mr. Rich, the owner
of an Export House whose accounts has been audited by CA. Old for more than 15 years. After a few
days Mr. Rich approached CA. Young and offered a certification work which hitherto had been done
by CA. Old. Fees charged by CA. Young is also not less than fee charged by CA. Old.
Part IV – Conclusion
➢ In view of above decision CA Young should ask the client to come through CA Old. However, CA
Young undertook the work without informing CA. Old. Thus, CA. Young is held guilty under Clause
(6) of Part I of the First Schedule to the Chartered Accountants Act,1949
QNO First Schedule, Part I, Cl,6 Solicitation (Personal Communication) Old Course – (M10E, PM17, SM17,
679.000 TITANIUM CNO – PE.1140 M21M)
Mr. X, a Chartered Accountant and the proprietor of X & Co., wrote several letters to the Assistant
Registrar of Co-operative Societies stating that though his firm was on the panel of auditors, no audit
work was allotted to the firm and further requested him to look into the matter.
OR
Can a Practicing Chartered Accountant be held guilty of Professional Misconduct under the following
circumstances? Give your views with reasons in brief.
Z, a Chartered Accountant wrote several letters to Government Department, pointing out seniority of
his firm, sending his life sketch and stating that he had a glorious record of service to the country
as well as to the organization of accountancy profession with a view to get the audit work.
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
➢ Clause 6
As per Clause (6) of Part I of the First Schedule to the Chartered Accountants Act, 1949, 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.
Part III – Case Discussion
➢ In the given case, Mr. X, a Chartered Accountant and proprietor of M/s X and Co., wrote several
letters to the Assistant Registrar of Co-operative Societies, requesting for allotment of audit work.
Part IV – Conclusion
➢ In similar cases, it was held that the Chartered Accountant would be guilty of professional
misconduct under Clause (6) of Part I of the First Schedule to the Chartered Accountants Act, 1949.
The writing of continuous letter to ascertain the reasons for not getting the work is quite
alright but in case such either amount to request for allowing the work then Mr. X will be
liable for professional misconduct.
➢ Consequently, Mr. X would therefore be held guilty under Clause (6) of Part I of the First Schedule
to the Chartered Accountants Act, 1949.
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