Clause 4 – Part I – Second Schedule Flashcards
CA D started practice in Punjab in the year 2019. CA D issued ‘Turnover Certificate’ for M/s. A Traders to be forwarded to the Bank for the purpose of availing cash credit facility and machinery term loan. Brother of CA D was proprietor of M/s. A Traders.
As per Clause (4) of Part I of Second Schedule to the CA Act, 1949, a CA in practice is deemed to be guilty if he expresses his opinion on FS of any business or enterprise in which he, his firm, or a partner in his firm has a substantial interest.
Further, it is not permissible for a member to undertake the assignment of certification, wherein the client is relative of the member. The “relative” for this purpose would refer to the definition mentioned in Accounting Standard (AS) - 18.
In the given situation, CA Dev started practice in Punjab in the year 2019. CA D issued Turnover certificate for M/s. A Traders to be forwarded to the Bank for the purpose of obtaining Loan. Brother of CA D is proprietor of M/s. A Traders.
Brother is very well covered in the definition of relative mentioned in Accounting Standard (AS)-18.
Hence, CA D is guilty of professional misconduct.
