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Tuesday, August 11, 2009

Any Answers................

Comment on the following with reference to the Chartered Accountants Act, 1949 and Schedules thereto:
  1. Mr. S, a Chartered Accountant published a book and gave his personal details as the author. These details also mentioned his professional experience and his present association as partner with M/s RST, a firm.
  2. Mr. C accepted the Statutory audit of M/s PSU Ltd., whose net worth is negative for the year 2003-04. The audit was to be conducted for the year 2004-05. The audited accounts for the year 2004-05 showed liability for payment of tax audit fees of Rs. 15,000 in favour of Mr. E, the previous auditor.
  3. M/s PQR, a firm of Chartered Accountants with 5 partners has accepted the audit of ABC Pvt. Ltd. for 2004-05 at, an audit fee of Rs. 2,500. ABC Pvt. Ltd. was incorporated in April, 2002, but had commenced operations in January, 2005.
  4. Mr. P, a Chartered Accountant in practice entered into a partnership with Mr. L, an advocate for sharing of fees for work sent by one to the other. However, due to some disputes, the partnership was dissolved after 1 month without any fees having been received.


  1. i) Mr S is guilty under clause 6 part I of First Schedule for solicitation.
    ii) Mr C could have been be held guilty under relevant Notification issued by the Institute on Undisputed Audit fees but in case of sick units it is not applicable.
    iii)Min. fees for firm having 5 partners or more but less than 10 partners - Rs 6000/- cities having population>30 lakhs else Rs3500/-.
    iv) No idea, sir please answer this or give reference(page no.) of your book, as I am referring it.

  2. Correct the answer for part iii too. If you will see this notification, it is stating that the limits for fees are not applicable for two accounting years from the date of commencement of operations

    For part iv, refer Clause 2 Part I First Schedule