Page 394 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

Member in practice in a HUF doing business
Types of Interest: A member of the Institute can acquire interest in a family business as a proprietary firm, a
partnership firm, or as a Karta or a member of a Hindu Undivided Family (HUF).
Devolved: Members must provide evidence that their interest in the family business was acquired through
inheritance, succession, or partition of the business.
Non-Active Involvement: Members must demonstrate that they were not actively involved in running the
business and that they did not create the business themselves.
Declaration Submission: To support their case, members must submit a declaration in the prescribed format
and the necessary documents to the relevant Decentralized Office for review.
Serving as the Karta: If a member in practice is serving as the Karta of a HUF engaged in a family business, they
will be considered within the prescribed limit set by the Council if they use funds solely belonging to the HUF
for investments, provided they are not actively involved in managing the business.
Teaching Limits
Regulation 190A: According to the Chartered Accountants Regulations, 1988, a practicing chartered accountant
is not allowed to participate in any other business or occupation besides accounting, unless permission is granted
by the Council.
Council Resolution: The Council has passed a resolution that grants general permission for private tutoring
and part-time tutoring under the Institute's coaching organization, as well as specific permission for part-time or
full-time tutoring under any educational institution other than the Institute's coaching organization.
Teaching Hours Limitation: This permission is subject to the condition that the total number of teaching hours
for these activities does not exceed 25 hours per week, in order to still be able to perform attest functions.

Note: Some Concepts & Clarification are covered with Council guidelines & recent decisions of Ethical Standard

Board given at the end of the Chapter

(CNO-PE.1300) CLAUSE 12 Bare Text:
Clause (12) 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.
Section 26
Section 26: The clause related to Section 26 of the Chartered Accountants Act, 1949.
Exclusivity: This section of the Act stipulates that only members of the Institute are allowed to sign documents
on behalf of a practicing Chartered Accountant or a Chartered Accountant firm.
Which Documents: The signing pertains to any document that is being signed in the professional capacity of a
Chartered Accountant or a Chartered Accountant firm.
Financial Statements & Reports
Final Documents: The 'financial statements' and 'reports' referred to in this clause are those that are ultimately
finalized and submitted to outside authorities.
Financial Statement: In the context of this clause, a 'financial statement' refers to an examination of accounts
or financial statements given under a statutory enactment or otherwise.
Report: A 'report' may include a wider range of documents, but in this context, it specifically refers to a report
arising from a professional assignment undertaken by the individual or their firm. The report is submitted to the
client(s) or, if required, to an outsider on behalf of the individual or their firm.
Subject Matter: The subject matter of the report should express a professional opinion, whether financial or
non-financial.
Delegation
Routine Documents: The Council has clarified that the power to sign routine documents, which do not require
a professional opinion or authentication, can be delegated.

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