Appendix No-25 – The Chartered Accountants Act, 1949

12^th May, 2004

No. 1-CA(7)/75/2004.– In exercise of the powers conferred by Clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949, and in supersession of Notification No. 1-CA(7)/29/95 dated 1^st March, 1995 published in Part III Section 4 of the Gazette of India dated 25^th March, 1995, the Council of the Institute of Chartered Accountants of India hereby specifies that a member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he on behalf of the firm of chartered accountants in which he is a partner (a) consisting of 4 or more partners but less than 8 partners with at least one partner holding a certificate of practice for five years or more; or (b) consisting of 8 or more partners with at least one partner holding a certificate of practice for five years or more; accepts or carries out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:-

Provided that such restriction shall not apply in respect of the following:-

i) audit of accounts of charitable institutions, clubs, provident funds, etc. where the appointment is honorary i. e. without any fees;

ii) statutory audit of branches of banks including regional rural banks;

iii) audit of newly formed concerns relating to two accounting years from the date of commencement of their operations; and

iv) certification or audit under Income-tax Act or other attestation work carried out by the Statutory Auditor.

This becomes operative for all audits relating to accounting periods beginning on or after 1.4.2004.

Explanation –

For the purpose of this notification, the expression statutory auditor means and includes a chartered accountant appointed as an auditor under a Central/State or Provincial Act as well as an auditor appointed under any agreement.

The Council has clarified that for the above purpose, the audit of Provident Fund Trust, Gratuity Fund etc. carried out by the statutory auditor are to be considered as separate and distinct audit so that the above restrictions are applicable to it.

(DR. Ashok Haldia)

Secretary

Amendment

¹Substituted for the following Notification:-

^A[Published in Part III Section 4 of the Gazette of India dated 25^th March, 1995]

Notification

(Chartered Accountants)

1^st March, 1995

No. 1-CA(7)/29/95: In exercise of the powers conferred by Clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949, and in supersession of Notification No. 1- CA(7)/158/87 dated May 25^th, 1987 published in part III Section 4 of the Gazette of India dated June 6^th, 1987, the Council of the Institute of Chartered Accountants of India hereby specifies that a member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he on behalf of the firm of chartered accountants in which he is a partner (a) consisting of four or more partners but less than 8 partners with at least one partner holding a certificate of practice for five years or more; or (b) consisting of eight or more partners with at least one partner holding a certificate of practice for five years or more; accepts or carries out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:

Provided that such restriction shall not apply in respect of the following:

(i) audit of accounts of charitable institutions, clubs, provident funds, etc. where the appointment is honorary i.e. without any fees;

(ii) statutory audit of branches of banks including regional rural banks;

(iii) audit of newly formed concerns relating to two accounting years from the date of commencement of their operations; and

(iv) certification or audit under Income-tax Act or other attestation work carried out by the Statutory Auditor.

This becomes operative for all audits relating to accounting periods beginning on or after April 1, 1995.

Explanation –

For the purpose of this notification, the expression statutory auditor means and includes a chartered accountant appointed as an auditor under a Central/State or Provincial Act as well as an auditor appointed under any agreement.

A.K. Majumdar

Secretary

^A Earlier substituted for the following Notification:-

[Published in Part III Section 4 of the Gazette of India dated 6^th June, 1987]

Notification

(Chartered Accountants)

25^th May, 1987

No. 1-CA(7)/158/87: In exercise of the powers conferred by clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949, the Council of the Institute of Chartered Accountants of India hereby specifies that a member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he on behalf of the firm of chartered accountants in which he is a partner (a) consisting of 4 or more partners but less than 8 partners with atleast one partner holding a certificate of practice for five years of more; or (b) consisting of 8 or more partners with atleast one partner holding a certificate of practice for five years or more; accepts or carries out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount below what is specified hereunder:-

Provided that such restriction shall not apply in respect of the following:

i) audit of accounts of charitable institutions, clubs, provident funds, etc. where the appointment is honorary, i.e. without any fees;

ii) statutory audit of branches of banks including regional rural banks;

iii) audit of newly formed concerns relating to two accounting years from the date of commencement of their operations; and

iv) certification or audit under Income-tax Act or other attestation work carried out by the Statutory Auditor.

This becomes operative for all audits relating to accounting periods beginning on or after 1^st August, 1987.

Explanation –

For the purpose of this notification, the expression Statutory Auditor means and includes a chartered accountant appointed as an auditor under a Central/State or provincial Act as well as an auditor appointed under any agreement.

G. Banerjee Deputy

Secretary

[The Notification given in Appendix No. (26) was in operation until issuance of Council General Guidelines, 2008 – No. 1-CA(7)/02/2008 dated 8^th August, 2008, given at Appendix No. (34)]