Page 420 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

E-Return Registration: Chartered Accountants in service can register for e-returns if it does not conflict with
their employment obligations, but they cannot certify the return.
Registration Authority: A Chartered Accountant in practice can serve as a Registration Authority (RA) to obtain
digital signatures for their clients.
Equity Derivative & Commodities Trading:
Equity Derivative Trading - Yes. It is permissible for a member in practice to transact in derivatives in his
individual capacity (and not for clients or any other person).
Commodities Trading - No. It is not permissible for members in practice to transact in commodity derivative
transactions.
Director Residency: The Ethical Standards Board noted that a Director, as per section 149(3) of the Companies
Act, 2013, is required to reside in India for a minimum of 182 days in the previous calendar year. Such a director
would be within the scope of Director Simplicitor (which is generally permitted as per ICAI norms), if he is a
non-executive director, only required in the Board Meetings, and not paid any remuneration except for attending
such Board Meetings.
Second Schedule Part I Clause 4 Shortcut – (VJ is playing Famous DISC BITS)
Valuer of Unquoted Equity: The Ethical Standards Board decided in 2013 that a statutory auditor/tax auditor
cannot be the valuer of unquoted equity shares of the same entity, as per the amended Rule 11U of Income Tax.
However, if there is no specific restriction under any law, this is permissible, subject to compliance with the
Code of Ethics relating to independence.
Joint Venture Audit: A Chartered Accountant in practice who is a non-executive director in a company, or a
firm where he is a partner, should not accept the appointment as a statutory auditor of a company that is a joint
venture of the original company, as it could compromise independence.
Family Member in Management Committee: A practicing member cannot accept the appointment of a
statutory audit in a society where an immediate family member (spouse or dependent) holds an honorary
position on one of the managing committees of institutes governed by the society.
Director (Urban) Co-operative Banks: A practicing Chartered Accountant with a Certificate of Practice can
serve on the 'Board of Management' in Primary (Urban) Co-operative Banks. This role is akin to a Director-
Simplicitor, with no involvement in daily operations and only receiving sitting fees for services.
Internal Audit of PF Trust: A CA Firm which has been appointed as the internal auditor of a PF Trust by a
Government Company cannot be appointed as its Statutory Auditor.
Share Acquisition by Internal Auditor: There is no prohibition for internal auditors of a company to acquire
or purchase shares of the same company.
Concurrent Auditor: A concurrent auditor of a bank 'X' cannot be appointed as a statutory auditor of bank 'Y',
which is sponsored by 'X'.
Bank Audit: A Chartered Accountant in practice cannot accept an audit assignment of a bank if he has taken a
loan against a Fixed Deposit held by him in that bank.
Internal Auditor of Company: A CA/CA Firm can act as the internal auditor of a company and as the statutory
auditor of its employees' PF Fund under the new Companies Act (2013).
Trust Audit: There is generally no conflict of interest for a Chartered Accountant who is a member of a trust to
also serve as the trust's auditor. Exceptions exist if a specific statute governing the trust prohibits a trust member
from being its auditor or if there is a conflict of interest as outlined in the Code of Ethics.
Stock Audit: A chartered accountant who is the statutory auditor of a bank cannot accept stock audit/inspection
Audit of the same branch of the bank or any of the branches of the same bank or sister concern of the bank, for
the same financial year.
Council General Guidelines 2008
Auditor Definition for Indebtedness: The term "auditor" does not include internal auditors, concurrent
auditors, or auditors giving reports to management as per Chapter X of the Council General Guidelines, 2008.
The criteria and limits of indebtedness apply only to statutory audits.

www.auditguru.in 19.64