Page 425 - CA Final PARAM Digital Book.

➢ However, if the person signing the financial statements on his behalf is not 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, Mr. S is wrong in delegating signing of financial statements to his staff.
➢ In view of this, S would be guilty of professional misconduct for allowing the person signing the
financial statements on his behalf to his articles and staff under Clause 12 of Part 1 of First Schedule
of the Chartered Accountants Act, 1949.

First Schedule, Part II,Cl,2 --Share of Fees from Old Course – (M14E, M16M, PM17, SM17, N19E, N23M)
QNO Lawyer of Company New Course – (SM23)
729.000
TITANIUM CNO – PE.1340
Mr. 'C', a Chartered Accountant holds a certificate of practice while in employment also, recommends a
particular lawyer to his employer in respect of a case. The lawyer, out of the professional fee received
from employer paid a particular sum as referral fee to Mr. 'C'.
OR
Mr. C a Chartered Accountant employed as Senior executive in charge of Tax in a company, and not
holding certificate of practice recommends a particular lawyer to his employer in respect of a case. The
lawyer, out of the professional fee received from the employer of Mr. C paid a particular sum as
referral fee to Mr. C . Comment with reference to the Chartered Accountants Act, 1949 and schedules
thereto

Answer Part I -- Relevant Laws
▪ Clause (2) of Part II of the First Schedule to the Chartered Accountants Act, 1949

Part II -- Requirements of Relevant Laws

➢ A member of the Institute(other than a member in practice) shall be guilty of professional
misconduct, if he being an employee of
any company, firm or person accepts or
agrees to accept any part of fee, profits or
gains from a lawyer, a chartered
accountant or broker engaged by such
company, firm or person or agent or
customer of such company, firm or person
by way of commission or gratification.

Part III – Case Discussion
➢ In the present case, Mr. C who beside
holding a certificate of practice, is also an
employee and by referring a lawyer to the
company in respect of a case, he receives
a particular sum as referral fee from the
lawyer out of his professional fee.

Part IV – Conclusion
➢ Therefore, Mr. C is guilty of professional misconduct by virtue of Clause (2) of Part II of First schedule.
Author’s Note

AABCC is the shortcut to remember this clause.
A,A- Advocate ,Agent / B-Broker / C-CA, C-Customer

First Schedule, Part III, Cl,2 --Not Responding to ICAI Old Course – (M10E, PM17, SM17, M22M)
QNO (Date of Leaving Services of the Firm)
730.000 New Course-(SM23)
TITANIUM CNO – PE.1380
Mr. X, a Chartered Accountant, employed as a paid Assistant with a Chartered Accountant firm. On 31st
December 2016 he leaves the services of the firm. Despite many reminders from ICAI he fails to reply

regarding the date of leaving the services of the firm.
Answer Part I -- Relevant Laws
▪ Clause (2) of Part III of the First Schedule to the Chartered Accountants Act, 1949

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