Page 392 - CA Final PARAM Digital Book.

However, a member of the Institute in practice shall not respond to any tender issued by an
organization or user of professional services in areas of services which are exclusively reserved for
Chartered Accountants, such as audit and attestation services.

Though, such restriction shall not be applicable where minimum fee of the assignment is prescribed
in the tender document itself or where the areas are open to other professionals along with the
Chartered Accountants.

Part III – Case Discussion
➢ In the instant case, M/s LMN & Associates responded to a tender of tax audit which is exclusively
reserved for Chartered Accountants even though no minimum fee was prescribed in the tender
document.

Part IV – Conclusion
➢ Therefore, M/s LMN & Associates shall be held guilty of professional conduct for responding to such
tender in view of abovementioned guideline.
Author’s Note

For better understanding of tendering refer Chart in QNO 681.000

QNO First Schedule, Part I,Cl,6 --Solicitation (Tender of GST Audit) Old Course—(N20E)
682.500 TITANIUM CNO – PE.1140

M/s ABC & Co., a firm of Chartered Accountants responded to a tender from a State Government for
appointment of GST Auditor wherein no minimum fee was prescribed. For this purpose, the firm also

paid ` 50,000 as earnest deposit as part of the terms of the tender. Comment on the above with reference
to the Chartered Accountants Act, 1949, Code of Ethics and Schedules to the Act.
Answer Responding to Tenders: Clause (6) of Part I of the First Schedule to the Chartered Accountants Act,
1949 lays down Guidelines tor responding to tenders, etc.

As per the Guideline issued by the Council of the Institute of Chartered Accountants of India, a member
of the Institute in practice shall not respond to any tender issued by an organization or user of
professional services in areas of services which are exclusively reserved for chartered accountants,
such as audit and attestation services.

However, such restriction shall not be applicable where minimum fee of the assignment is prescribed
in the tender document itself or where the areas are open to other professionals along with the
Chartered Accountants. Further, in respect of a non-exclusive area, members are permitted to pay
reasonable amount towards earnest money/security deposits.

M/S ABC & Co., a firm of Chartered Accountants responded to a tender from a State Government for
appoint of GST Auditor and for this purpose, the firm also paid ` 50,000 as earnest deposit as part of
the terms of the tender.

In the instance case, since GST Audit does not fall within exclusive areas for chartered accountants,
M/S ABC & Co 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 -Website (Award Highlighting) Old Course – (N15R, PM17, N18M)
683.000 TITANIUM CNO – PE.1140
CA. Intelligent, a Chartered Accountant in practice, provides part-time tutorship under the coaching
organization of the Institute. On 30th June 2015, he was awarded ‘Best Faculty of the year’ as gratitude

from the Institute. Later on, CA. Intelligent posted his framed photograph on his website wherein he
was receiving the said award from the Institute.
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

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