Page 422 - CA Final PARAM Digital Book.

First Schedule, Part I,Cl,12 -Signing (Multiple Old Course – (M11E, M14E, PM17, SM17, M17M
QNO Matters) M18M, N19R, N19E, SM21, N21M)
723.000
TITANIUM CNO – PE.1300 New Course – (SM23)
Mr. 'A' is a practicing Chartered Accountant working as proprietor of M/s A & Co. He went abroad for 3
months. He delegated the authority to Mr. 'Y' a Chartered Accountant his employee for taking care of
routine matters of his office. During his absence Mr. 'Y' has conducted the under mentioned jobs in the
name of M/s A & Co.
(i) He issued the audit queries to client which were raised during the course of audit.
(ii) He issued production certificate to a client under Central Excise Act, 1944.
(iii) He attended the Income Tax proceedings for a client as authorized representative
before Income Tax Authorities.
Please comment on eligibility of Mr. 'Y' for conducting such jobs in name of M/s A & Co. and liability of
Mr. 'An' under the Chartered Accountants Act, 1949.
OR
CA. Smart, a practicing Chartered Accountant was on Europe tour between 15-9-15 and 25-9-15. On 18-9-
15 a message was received from one of his clients requesting for a stock certificate to be produced to
the bank on or before 20-9-15. Due to urgency, CA. Smart directed his assistant, who is also a Chartered
Accountant, to sign and issue the stock certificate after due verification, on his behalf.
OR
Mr. 'K’, a practicing Chartered Accountant is the proprietor of M/s K & Co. since 1995. He went abroad in
the month of December 2018. He delegated the authority to Mr. ‘Y’ a Chartered Accountant, his employee
for taking care of the important matters of his office. During his absence Mr. 'Y' has conducted the
undermentioned jobs in the name of M/s K & Co.
(i) He issued Net worth certificate to a client for furnishing to a Bank.
(ii) He attended the GST proceedings for a client as authorized representative before GST
Authorities.
Answer Part I -- Relevant Laws
▪ Clause (12) of Part I of the First Schedule to the Chartered Accountants Act, 1949

Part II -- Requirements of Relevant Laws
➢ A Chartered Accountant in practice is deemed to be guilty of professional misconduct “if he allows
a person not being a member of the Institute in practice or a member not being his partner to sign
on his behalf or on behalf of his firm, any balance sheet, profit and loss account, report or financial
statements”.

The Council has clarified that the power to sign routine documents on which a professional opinion
or authentication is not required to be expressed may be delegated and such delegation will not
attract provisions of this clause like issue of audit queries during the course of audit, asking for
information or issue of questionnaire, attending to routing matters in tax practice, subject to
provisions of Section 288 of Income Tax Act etc.

Part III – Case Discussion
➢ In this case CA. ‘A’ proprietor of M/s A & Co., went to abroad and delegated the authority to another
Chartered Accountant Mr. Y, his employee, for taking care of routine matters of his office who is not
a partner but a member of the Institute of Chartered Accountants of India. In the given case, Mr. ‘Y’,
a chartered accountant being employee of M/s A & Co. has issued audit queries which were raised
during the course of audit.
Part IV – Conclusion
➢ Here “Y” is right in issuing the query, since the same falls under routine work which can be delegated
by the auditor. Therefore, there is no misconduct in this case as per Clause (12) of Part I of First
schedule to the Act.
Part III – Case Discussion
➢ In this case CA. ‘A’ proprietor of M/s A & Co., went to abroad and delegated the authority to another
Chartered Accountant Mr. Y, his employee, for taking care of routine matters of his office who is not
a partner but a member of the Institute of Chartered Accountants of India. In the given case, Mr. ‘Y’,
a chartered accountant being employee of M/s A & Co. has issued production certificate to a client
under Central Excise Act, 1944.
Part IV – Conclusion

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