Some Ethical Issues

Whether the statutory auditors consisting of ten or more members can conduct the branch audits of the same company?

The Council has prescribed certain self regulatory measures in order to ensure a healthy growth of the profession and an equitable flow of professional work among the members. One of the recommendations of this nature is that the branch audits of a company should not be conducted by its statutory auditors consisting of 10 or more members, but should be conducted by the local firms of auditors consisting of less than ten members. This should not be understood to mean any restriction on the right of the statutory auditors to have access over branch accounts conferred under the Companies Act, 1956. This restriction may not apply in the following cases:

(a) where the accounting records of the branches are maintained at the head office of the respective companies; and

(b) where significant operations of an undertaking or a company are carried out at its branch office.

(ii) Issue No.2

What should be the size of signboard for the office?

With regard to the size of the signboard for his office that a Member can put up, it is a matter in which the members should exercise their own discretion and good taste. The size of the signboard should be reasonable. The use of glow signs or lights on large-sized boards as is used by traders or shopkeepers would not be proper. A member can have a name board at the place of his residence with the designation of Chartered Accountant, provided it is a name plate or name board of an individual member and not of the firm.

(iii) Issue No.3

Can a member share profits with the widow of his deceased partner?

When there are two or more partners and one of them dies, the widow of the deceased partner can continue to receive a share of the profit of the firm. A legal representative, say widow of a deceased partner, would be entitled to share the profits only where the partnership agreement contains a provision that on the death of the partner his widow or legal representative would be entitled to such payment by way of sharing of fees or otherwise for the specified period.