Professional Ethics

A C.A should function subject to the provisions of the Chartered Accountants Act, 1949.

First we should know about “Ethics’”, “Professional Ethics”.

Professional ethics:

The ethics of an accountant would specify the behavior towards

• His fellows of the professional and                    
• Other professions and                                                
• Towards members of the public.

It should be noted that the modes of behavior given in the act are only illustrative and not exhaustive.

Before knowing about ethics we should know about the following:

1. Who are the members?
2. Members who are deemed to be in practice & disabilities.
3. Need and importance of Certificate of practice(COP)
4. What designations a C.A can use?
5. What is the code of ethics?
6. What is the main objective and fundamental principles of a professional accountant?

1. Who are the members?

The members of the institute is divided into tow classes they are

1. Associates
2. Fellows

Associates:

Any person shall, on his name, being entered in the Register, be deemed to have become an Associate member of the institute and be entitled to use the letters A.C.A after his name to indicate that he is an Associate member of the ICAI.

Fellows:

The following categories of members shall be entered in the register as Fellow of the institute

1. Member, being an associate who has been in continuous practice in India for at least five years, whether before or after commencement of the act, or whether partly before and partly after the commencement of the act.
2. Member who has been as associate for a continuous period of not less than five years and having equivalent qualification and experience as a practicing member.

2. Members who are deemed to be in practice:

A member of the Institute shall be deemed to be in practice when individually or in Partnership with CA’s in practice, he, in consideration of remuneration received or to be received

4. Renders such other services as, in the opinion of the Council, is or may be rendered by a CA in practice.

Note:

A member shall be deemed to be in practice in his professional capacity, but not in his personal capacity or in capacity as an employee acts as:

A liquidator, Executor, Administrator, Arbitrator, Receiver, or Representative for costing, financial or taxation matters or

Takes up an appointment made by Central or state government or

A Secretary, unless his employment is on a salary cum full time basis.

Disabilities of membership: Sec.8 contains disabilities they are as follows:

3. Need and importance of Certificate of practice (COP):

No member of the Institute shall be entitled to practice Whether in India or elsewhere unless he has obtained Certificate of practice from the council.

Fees for COP:

Annual fees of Rs.3,000/- on or before 1^st April of every year and fees can be increased up to Rs.6,000/- with the prior approval of the Central Government.

4. What designations a C.A can use:

A member in practice cannot use any designation other than of a Chartered Accountant. If he does not use the designation of a C.A and he is not in practice then he may use any other description. Even in case of partnership firm and partners are members & are in practice then the name of the firm can be known as Chartered accountants. And As per Sec.25 (1) no company, whether incorporated in India or elsewhere, shall practice as chartered accountants.

 5. What is the code of ethics? :

The code of ethics is framed by International federation of Accountants (IFAC).It contains objective for code of ethics and fundamental principles those should be followed by a chartered accountant.

6. What is the main objective and fundamental principles of a professional accountant?

Objectives:

The objectives require the following basic needs to be met:

Fundamental principles:

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