Clause (1-4) of Part 1 – schedule I (Professional ethics)

The Clauses have been broken down to make perfect meaning for the students. But during this we have not changed the meaning of the content. Students are expected to use the same language in the Exams.

PART 1 SCHEDULE I

A Chartered Accountant in practice is deemed to be guilty of professional misconduct if he –

Clause (1) allows any person to practice in his name as a chartered accountant unless such person is also a chartered accountant in practice and is in partnership with or employed by him.

It ensures that the work of the accountant will be carried out by a Chartered Accountant who may be his partner, or his employee and would work under his control and supervision. Hence unqualified accountant carrying out such work and being convicted to do so, shall face Fine and also Imprisonment if Such conviction is continued for more than 1 time.

Clause (2) pays or allows or agrees to pay or allow,

Directly or indirectly,

any share, commission or brokerage in the fees or profits of his professional business,

to any person other than a member of the Institute

or a partner

or a retired partner

or the legal representative of a deceased partner,

or a member of any other professional body or with such other persons having such qualification as may be prescribed, from time to time, in or outside India.

A chartered accountant is allowed to enter into partnership only with Restricted individuals specified under Clause 4 Part 1 Schedule I.

A partner is allowed to share profits with the legal representative of deceased partner OR Widow of the deceased partner only if the Partnership deed contains such Information/clause. Also such there is no bar in the Code of Ethics to accept such assignment by the Practicing Member wherein a percentage of professional fee is deducted by the Government to meet the administrative and other expenditure.

Clause (3) accepts or agrees to accept

Any part of the profits of the professional work of a person

Who is not a member of the Institute.

Just as a member cannot share his fees with a non-member, he is also not permitted to receive and share the fees of others except for sharing with Member of such professional body or other person having such qualification as may be prescribed

Clause (4) enters into partnership,

in or outside India,

with any person other than Chartered Accountant in practice

or

such other person who is a member of any other professional body having such qualifications as may be prescribed

The Council has prescribed (Regulation 53-A of the Chartered Accountants Regulations, 1988) the professional bodies which are as under:-

• The Institute of Company Secretaries of India established under the Companies Secretaries Act, 1980 (C.S)
• The Institute of Cost & Works Accountants of India established under the Cost & Works Accountants Act, 1959(I.C.W.A)
• Bar Council of India established under the Advocates Act, 1961 (Lawyer)

• The Indian Institute of Architects established under the Architects Act, 1972 (Architects)
• The Institute of Actuaries of India established under the Actuaries Act, 2006 (Actuary).