Holding COP and joining as promotor director
This query is : Resolved
12 July 2020
I was a promotor director of a company(not holding COP at tat time).relinquished in 2003.now I am holding COP and undertaking attesting function. Due to Covid the other employee director resigned. Can I rejoin as promotor director and still continue my practice. Appreciate your guidance. I have substantial interest in the company and I am not acting as a statutory of the company. My wife is the other director.
Regards
Srinivasan
Regards
Srinivasan
12 July 2020
In my view you can rejoin with declarations of your interest in the Company to the Board of the Company.
14 July 2020
Thank you. My question is whether I can continue to undertake assurance function as a ca after joining as promotor director and does it require any permission from the institute
28 July 2024
As a Chartered Accountant (CA) in India, if you are considering taking up a role as a promoter director of a company, you need to be mindful of the regulations set by the Institute of Chartered Accountants of India (ICAI) regarding the assurance function and other professional responsibilities. Here’s a detailed look into the considerations and requirements:
### **1. **Regulations and Guidelines:**
#### **ICAI’s Code of Ethics:**
- **Independence and Objectivity:**
- As per ICAI’s Code of Ethics, CAs must maintain independence and objectivity in their professional work. If you undertake an assurance function (e.g., audit) while being a promoter director, there could be a conflict of interest which might compromise your independence.
#### **Regulation 190A of the CA Regulations:**
- **Prohibition on Assurance Function:**
- As per Regulation 190A of the Chartered Accountants Regulations, 1988, a CA who is a director or partner in a company cannot be engaged in the audit or assurance functions for that company. This regulation is aimed at preventing conflicts of interest and maintaining professional independence.
### **2. **Permission from ICAI:**
#### **Permission Requirement:**
- **Engaging in Assurance Function:**
- If you are involved as a promoter director, you cannot undertake assurance functions for that company. The ICAI typically does not grant permission to engage in assurance functions if you are holding such a position.
#### **Notification to ICAI:**
- **Disclosure:**
- You should inform ICAI of your new role and seek guidance on any specific compliance requirements or restrictions related to your professional practice.
### **3. **Practical Considerations:**
#### **Impact on Professional Practice:**
- **Conflicts of Interest:**
- Holding a promoter director position may create a conflict of interest when performing assurance functions. Ensure that you are compliant with ICAI guidelines to avoid any ethical issues.
#### **Alternative Roles:**
- **Separation of Functions:**
- If you want to continue providing assurance services, you would need to ensure that these services are provided to entities where you are not involved as a director or promoter.
### **4. **Steps to Follow:**
1. **Review ICAI Guidelines:**
- Review the latest ICAI guidelines and regulations related to undertaking professional services while holding a directorial role.
2. **Seek ICAI’s Guidance:**
- Contact ICAI directly to seek specific advice regarding your situation. This can help in ensuring that you are in compliance with all applicable regulations.
3. **Assess Conflict of Interest:**
- Carefully assess any potential conflicts of interest that may arise from your dual roles and ensure that you can maintain professional independence.
### **Conclusion:**
In summary, if you are a promoter director, you generally cannot undertake assurance functions (e.g., audit) for the company you are involved with due to potential conflicts of interest. It is important to adhere to the ICAI regulations and seek their guidance to ensure compliance and maintain professional integrity.
For the most accurate and personalized advice, contacting ICAI directly is recommended to address your specific circumstances and obtain official guidance.
### **1. **Regulations and Guidelines:**
#### **ICAI’s Code of Ethics:**
- **Independence and Objectivity:**
- As per ICAI’s Code of Ethics, CAs must maintain independence and objectivity in their professional work. If you undertake an assurance function (e.g., audit) while being a promoter director, there could be a conflict of interest which might compromise your independence.
#### **Regulation 190A of the CA Regulations:**
- **Prohibition on Assurance Function:**
- As per Regulation 190A of the Chartered Accountants Regulations, 1988, a CA who is a director or partner in a company cannot be engaged in the audit or assurance functions for that company. This regulation is aimed at preventing conflicts of interest and maintaining professional independence.
### **2. **Permission from ICAI:**
#### **Permission Requirement:**
- **Engaging in Assurance Function:**
- If you are involved as a promoter director, you cannot undertake assurance functions for that company. The ICAI typically does not grant permission to engage in assurance functions if you are holding such a position.
#### **Notification to ICAI:**
- **Disclosure:**
- You should inform ICAI of your new role and seek guidance on any specific compliance requirements or restrictions related to your professional practice.
### **3. **Practical Considerations:**
#### **Impact on Professional Practice:**
- **Conflicts of Interest:**
- Holding a promoter director position may create a conflict of interest when performing assurance functions. Ensure that you are compliant with ICAI guidelines to avoid any ethical issues.
#### **Alternative Roles:**
- **Separation of Functions:**
- If you want to continue providing assurance services, you would need to ensure that these services are provided to entities where you are not involved as a director or promoter.
### **4. **Steps to Follow:**
1. **Review ICAI Guidelines:**
- Review the latest ICAI guidelines and regulations related to undertaking professional services while holding a directorial role.
2. **Seek ICAI’s Guidance:**
- Contact ICAI directly to seek specific advice regarding your situation. This can help in ensuring that you are in compliance with all applicable regulations.
3. **Assess Conflict of Interest:**
- Carefully assess any potential conflicts of interest that may arise from your dual roles and ensure that you can maintain professional independence.
### **Conclusion:**
In summary, if you are a promoter director, you generally cannot undertake assurance functions (e.g., audit) for the company you are involved with due to potential conflicts of interest. It is important to adhere to the ICAI regulations and seek their guidance to ensure compliance and maintain professional integrity.
For the most accurate and personalized advice, contacting ICAI directly is recommended to address your specific circumstances and obtain official guidance.
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