Page 391 - CA Final PARAM Digital Book.

First Schedule, Part I,Cl,6 Solicitation Old Course – (M06E, N10R, M12R, M12M, M13R, M14R, PM17,
QNO (Tender) Land Revenue SM17, N18M, N20E)
681.000
TITANIUM CNO – PE.1140 New Course – (SM23)
M/s LMN, a firm of Chartered Accountants responded to a tender from a State Government for
computerization of land revenue records. For this purpose, the firm also paid ` 50,000 as earnest
deposit as part of the terms of the tender.

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

➢ The Clause lays down guidelines for responding to tenders, etc. As per the guidelines if a matter
relates to any services other than audit, members can respond to any tender.
As per the guidelines issued by council a member can respond to tenders where minimum fees of
the assignment is prescribed in the
tender document itself or where
the areas are open to other
professionals along with Chartered
Accountants.

Further, in respect of a non-
exclusive area, members are
permitted to pay reasonable
amount towards earnest
money/security deposits.

Part III – Case Discussion
➢ In the present case, M/s LMN, a
firm of Chartered Accountants
responded to a tender from a State
Government for computerization
of land revenue records.

Part IV – Conclusion
➢ In the instance case, since computerization of land revenue records does not fall within exclusive
areas for chartered accountants, M/s LMN can respond to tender as well as deposit 50,000 as
earnest deposit and shall not have committed any professional misconduct.

QNO First Schedule, Part I,Cl,6 Solicitation (Tender) No Minimum Fees Old Course – (M17R, N17R, M20R)
682.000 TITANIUM CNO – PE.1140
Comment on the following with reference to the Chartered Accountants Act, 1949 and schedules thereto:
M/s LMN & Associates, a firm of Chartered Accountants responded to a tender issued exclusively for
Chartered Accountants by an organisation in the area of tax audit. However, no minimum fee was
prescribed in the tender document.
OR
PK Foundation decided to review its historical financial statements For this, it proposed a tender
exclusively for Chartered Accountants to obtain assurance, primarily by performing inquiry and
analytical procedures, about whether the financial statements as a whole are free from material
misstatement However, the foundation did not prescribe the minimum fee in the tender document M/s
Sodhi & Co, a Chartered Accountant firm, responded to such tender

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
➢ The clause lays down guidelines for responding to tenders, etc. It states that a member may respond
to tenders or enquiries issued by various users of professional services or organizations from time
to time and secure professional work as a consequence.

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