Auditaudit Staff asked 2 years ago
1 Answers
RaviRavi Staff answered 2 years ago

 
 
1. Management Consultancy Company cannot perform Accounting / Auditing / Tax Advisory / Executor, Liquidation, etc
2. MCC excludes Broking / Underwriting / Portfolio Management
3. Clause 11 govers work under general permission and specific permission cannot go beyond them
 
you can see video on below clarifications 
https://youtu.be/3PzLPFiTTHE?t=28m57s   (it will start from 28 min 57 Seconds when below topic starts)
 
 
Recent clarifications
Clarifications
Selling Agents

  1. Cannot become direct selling agent , can  become credit card credentials verifier” (General Permission)
  2. A chartered accountants in practice cannot become Financial Advisors and receive fees/commission from Financial Institutions such as Mutual Funds, Insurance Companies, NBFCs etc.
  3. It is not permissible for chartered accountants in practice to take agencies of UTI, GIC or NSDL.
  4. A member in practice cannot hold Customs Brokers Licence under section 146 of the Customs Act, 1962 read with Customs Brokers Licensing Regulations, 2013 in terms of the provisions of Code of Ethics.

 

  1. CA in practice can establish TIN-FC on its own or under franchisee (General Permission)

 
Settler of Trust

  1. It is permissible for a member in practice to be a settler of a trust.

 
Directorship

  1. The Ethical Standards Board while noting that there is requirement for a Director u/s 149(3) of the Companies Act, 2013 to reside in India for a minimum period of 182 days in the previous calendar year, decided that such a Director would be within the scope of Director Simplicitor (which is generally permitted as per ICAI norms), if he is non –executive director, required in the Board Meetings only , and not paid any remuneration except for attending such Board Meetings.

As per Committee on Ethical Standards has decided director of holding should not become auditor in subsidiary company, though it is not prohibited by Company Act 2013  
 
Statutory Auditor related clarifications

  • Whether a statutory auditor can accept the system audit of same entity?

Yes, the statutory auditor can accept the assignment of a system audit of the same entity, provided it do not involve any scrutiny/review of financial data and information.

  • A statutory auditor and tax auditor cannot be valuer of the unquoted equity shares as it would create threats to independence of the auditor, which may not possibly be reduced by application of safeguards.

 
Internal Auditor related clarifications

  • It is prohibitive to undertake the assignments of internal Audit of a client and entry of the transaction for Accounting simultaneously being violative of the provisions of the `Guidance Note on Independence of Auditors’.”
  • A CA/CA Firm can act as the internal auditor of a company & statutory auditor of its employees PF Fundunder the new Companies Act (2013).
  • 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.

 
Bank Audit related clarifications

  • Concurrent auditor of an entity cannot accept an assignment under any statute
  • A concurrent auditor of a bank ‘X’ cannot be appointed as statutory auditor of bank ‘Y’, which is sponsored by ‘X’. (Many RRBs are sponsored by Indian Banks)
  • A chartered accountant who is the statutory auditor of a bank cannot for the same financial year accept stock 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.

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