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A practising C.A.

  1. CANNOT solicit work.

  2. CANNOT give a client’s balance sheet on his letterhead.

  3. CAN give his audit report to the client on his letterhead.

  4. CANNOT describe on his letterhead or visiting cards association with other Indian/Foreign firms.

  5. CANNOT use a firm name not approved by the Institute

  6. CAN use a prescribe logo on visiting cards letterheads etc.

  7. CANNOT have his name displayed in yellow pages in bold.

  8. CAN describe himself as a C.A. in greeting cards and invitation cards. Can use the prefix CA before his name.

  9. CAN advertise in the official yellow pages brought out by the telephone authorities.

  10. CAN display his firm’s name board in a manner that it does not smack of advertisement.

  11. CAN advertise as per the notified guidelines


The Institute has permitted each member to establish their own websites. Members should ensure that their Websites are run on a ‘pull’ model and not a ‘push’ model of the technology to ensure that any person who wishes to locate the member would only have access to the information and the information should be provided only on the basis of specific ‘pull’ request.


The practising CA. —

CANNOT Respond to

  • advertisements inviting applications for appointment of auditors;

  • tenders or circulars or enquiry (made to more than one member) inviting quotations restricted to CA.

CAN Respond to Advertisement / Circular/ Tenders or enquiries

  • In other areas when competing with non CAs

  • If the same has been sought by World Bank /I.M.F./A.D.B./ Other similar International Body /Govt. Co. or Agency / Autonomous Body sponsored or regulated by the Govt / Nationalized Institution /Any other similar body which Council may prescribe.

  • In case of any other services, including audit services to be provided out of country


  • earnest money/security deposit in areas which are exclusive to CA as per law

CAN pay

  • a reasonable amount as price for tender/bid document;

  • earnest money/security deposit in other areas open to both Chartered Accountants and other professionals at their discretion.

  • reasonable amount towards earnest money/security deposit, if any C.As. are recruited in non-exclusive area.


A practising CA.

  1. CAN be a director simpliciter in a company without prior permission of Council.

  2. CAN be a promoter or promoter director in a company without prior permission of Council.

  3. CAN be a Managing Director or Wholetime Director of a company with prior permission of Council. This permission is granted if such CA and/or relative do not have substantial interest (i.e., more than 20%) in the company. However, w.e.f. 1-4-2005 the member is not permissible to do attest function.

Fees : For accounting periods beginning on or after 1-4-2004

Firm size (No. of partners)

Min. Audit fees on basis
of City Populn.

(At least 1 partner must have  held certificate for min. 5 yrs.)

20 lakhs and above


4 or more but less than 8

Rs. 5,000

Rs. 3,000

8 or more

Rs. 9,000

Rs. 6,000

Audits excluded from above restriction

  1. Charitable institutions, clubs, prov. funds, etc.*

    * Earlier this exemption applied only if the above audits were honorary. This requirement has now been removed

  2. Bank branch statutory audit of branches of banks including regional rural banks.

  3. Newly formed concerns for first two years from date of commencement of operations.

  4. Certificate/audit under Income-tax Act or other attestation work carried out by statutory auditor.

Applicable for Accounting period beginning on or after 1-4-2004.

A practising CA.

  1. CANNOT accept contingency or percentage based fees, except in the following cases:

  • A liquidator can accept his fee based on percentage of realisation of assets

  • An auditor of a co-operative society can accept fees based on percentage of paid-up capital, working capital, gross income/profits, or net income/profits

  • A valuer for direct tax purposes can accept fees based on the value of property valued.

  1. CAN share fees with other practising CA.. but not with others.


  1. Member in whole-time employment who is a partner in a firm not to be counted for the purpose of statutory audit limit u/s. 224(1B) of the Companies Act.

  2. Member in whole-time employment who is not a partner in a firm not to accept statutory audits of companies.

  3. The Incoming auditor of a company should, before accepting the audit, ensure himself that the provisions of sections

  • 224 (appointment of an auditor)

  • 224A (appointment of an auditor needing special resolution)

  • 225 (removal of an auditor)

of the Companies Act, 1956 have been duly complied with.

  1. The Incoming Auditor should not accept the audit without first communicating in writing with the Previous Auditor.

  2. A Chartered Accountant should not accept appointment as an auditor of an entity in case the undisputed audit fee of another Chartered Accountant for carrying the statutory audit has remained unpaid. This does not apply in case of sick units.

  3. NOTIFICATION No. 1-CA(7)/60/2002 :

A member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he accepts the appointment as statutory auditor of Public Sector Undertaking(s)/ Government Company(ies)/Listed Company(ies) and other Public Company(ies) having turnover of Rs. 50 crores or more in a year and accepts any other work(s) or assignment(s) or service(s) in regard to the same Undertaking(s)/Company(ies) on a remuneration which in total exceeds the fee payable for carrying out the statutory audit of the same Undertaking/Company.

Provided that

  1. The above restrictions shall apply in respect of fees for other work(s) or service(s) or assignment(s) payable to the statutory auditors and their associate concern(s) put together;

  2. For the above purpose,

  1. the term "other work(s)" or "service(s)" or "assignment(s)" shall include Management Consultancy and all other professional services permitted by the Council pursuant to Section 2(2)(iv) of the Chartered Accountants Act, 1949 but shall not include: –

  • audit under any other statute;

  • certification work required to be done by the statutory auditors; and

  • any representation before an authority;

  1. the term "associate concern" means any corporate body or partnership firm which renders the Management Consultancy and all other professional services permitted by the Council wherein the proprietor and/or partner(s) of the statutory auditor firm and/or their "relative(s)" is/are Director/s or partner/s and/or jointly or severally hold "substantial interest" in the said corporate body or partnership;

  2. the terms "relative" and "substantial interest" shall have the same meaning as are assigned under Appendix (10) to the Chartered Accountants Regulations, 1988.

  1. In regard to taking up other work(s) or service(s) or assignment(s) of the undertaking/company referred to above, it shall be open to such associate concern or corporate body to render such work(s) or service(s) or assignment(s) so long as aggregate remuneration for such other work(s) or service(s) or assignment(s) payable to the statutory auditor/s together with fees payable to its associate concern(s) or corporate body(ies) do/does not exceed the aggregate of fee payable for carrying out the statutory audit.

  2. This notification shall apply for any appointment(s) on or after 1st April, 2002.

Tax Audit under Income-tax Act

a) Firm of CAs not to accept more than 45 tax audits per partner.

b) Member not to accept more than 45 tax audits.

c) Record of Tax Audit Assignments to be maintained. (Refer ICAI Journal May, 2003 page 1127 for the format)

Other activities

A practising CA.

  1. CANNOT carry on any other business except with prior permission of the Council.

  2. CAN be involved in business through HUF so long as he is not Karta of HUF.

  3. CANNOT act as portfolio manager for his client.

  4. CAN carry on the profession of practising Chartered Secretary, Cost Accountancy or as an advocate with prior permission of the Council and provided the other professional body permits the same.

  5. CAN be the author of any books or articles and act as Editor of professional journals.

  6. CAN hold office in an honorary capacity in a charitable, educational or other non-commercial organisation.


A practising CA.

  1. CANNOT disclose confidential information relating to client to a third party without client’s permission or unless he is required to do so under law.

  2. SHOULD disclose his interest if any in his report, before expressing his opinion on the financial statements of a concern in which his relatives as defined under section 6 of the Companies Act, 1956 or such relatives along with himself are substantially interested.


Rules of Network and Merger–Demerger amongst the firms registered with the ICAI (Refer February 2005 ICAIJ p. 1075)

in case appointing authority(ies)/regulatory body(ies) specify(ies) more stringent condition(s)/restriction(s), the same shall apply instead of the conditions/restrictions specified in this Notification.


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CA.Tarun Maheshwari
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