Page 380 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

(CNO-PE.1120) CLAUSE 5
A Chartered Accountant in practice is deemed to be guilty of professional misconduct if he:
Clause (5) Secures either through the services of a person who is not an employee of such Chartered Accountant
or who is not his partner or by means which are not open to a Chartered Accountant, any professional business.
Provided that nothing herein contained shall be construed as prohibiting any agreement permitted in terms of
clause (2), (3) and (4) of this part.
Analysis
A Chartered Accountant (CA) in practice can be found guilty of professional misconduct under the
following condition:
Unauthorized Business Acquisition: If the CA secures professional business through means not open to a
Chartered Accountant, or through the services of a person who is not an employee or partner of the CA.
Permitted Agreements: Agreements allowed under item (2), (3), and (4) of this part are not considered as
misconduct.
Rationale
Self-reliance: Marcus Aurelius' dictum emphasizes the importance of standing on one's own feet, applicable in
all aspects of life but particularly in professional life.
Professional Respect: A Chartered Accountant should seek work based on the respect they command due to
their professional talent and skill.
Case Study
Communication: A Chartered Accountant sent letters to various Army Canteen officers, providing information
about himself, his experience, his partner, his office, and the norms for audit fees.
Violation: The Chartered Accountant was found guilty of violating Clauses (5) & (6).
Case Reference: The decision was made in the case of Jethanand Sharda vs. Deepak Mehta, as per the Council's
decision dated 1st to 4th July, 1998 (Page 61 of Volume VIII(2) of Disciplinary Cases).
Applicability of Clause 6 & 7

Responsibility: The actions of partners and employees in a firm, aimed at securing professional work, are
governed by specific rules.
Regulation: These rules are outlined in Clauses (6) and (7) of Part-I of the First Schedule of the Chartered
Accountants Act, 1949.

(CNO-PE.1140) CLAUSE 6
Clause (6): Solicits clients or professional work either directly or indirectly by circular, advertisement, personal
communication or interview or by any other means. Provided that nothing herein contained shall be construed
as preventing or prohibiting -
(i) Any Chartered Accountant from applying or requesting for or inviting or securing professional work from
another chartered accountant in practice; or
(ii) A member from responding to tenders or enquiries issued by various users of professional services or
organizations from time to time and securing professional work as a consequence
Analysis
Solicitation Prohibition: Chartered Accountants are prohibited from soliciting clients or professional work
through various means such as circulars, advertisements, personal communication, interviews, or any other
method.
Other Practicing CAs: An exception to the rule allows Chartered Accountants to seek professional work from
other practicing Chartered Accountants.
Tender Response: Members are permitted to respond to tenders or inquiries from organizations seeking
professional services and secure work as a result.

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