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Code of Ethics
 
The "Code of Conduct" is essentially a set of professional ethical standards regulating the relationship of Chartered Accountants with their clients, employers, employees, fellow members of the group and the public generally.
The maintenance of ethical standards is the collective concern of the Institute as well as all members of the profession. The ideal situation, of course, would be that the maintenance of ethical standards at individual member level is so self-evident that its further mention need not be made. However, the human nature being what it is, a man may often place his personal gain above service. Therefore, it is necessary to keep on reinforcing the idea of keeping up and observing the highest ethical standards repeatedly.
The Chartered Accountants Act, 1949 and the Schedules to the Act set out the acceptable forms of behaviour of the members of the profession. The Conduct of the Chartered Accountants is judged under provisions contained in the Chartered Accountants Act, 1949 and the Schedules thereto; setting out different forms of behaviour which would constitute professional or other misconduct under the Act. The Chartered Accountants Act is framed for the regulation of the profession of Chartered Accountants.
Section 22 of the Chartered Accountants Act defines and describes what constitutes `professional misconduct'. Under Section 22 of the Act, the expression `professional misconduct' shall be deemed to include any act or omission specified in any of the schedules.
However, during the last about 50 years since the Act came into force, certain conventions have been voluntarily established by the members of the profession which have enhanced the respect and confidence enjoyed by the profession. The Council of the Institute has been adhering to these principles strictly and scrupulously in order to maintain the reputation of the profession.

An extract from "contents" of Code of Ethics is given hereunder :-
CONTENTS
Chapter    
Page
1
 Code of Ethics - Introduction (Including IFAC guidelines on Professional Ethics) ---
1
2 & 2.1
 The Chartered Accountants Act, 1949 ---
7
2.2
 Members who are deemed to be in practice (including Council's Resolution regarding Management Consultancy Services) ---
7
2.3
 Significance of the Certificate of practice ---
11
2.4
 A member in practice is prohibited from using a designation other than Chartered Accountant ---
13
2.5
 Disabilities for purpose of membership ---
14
2.6
 Procedure in enquiries for Disciplinary matters relating to misconduct of the members of the Institute and important Councils decisions thereon ---
15
2.7
 Professional Misconduct defined ---
20
2.8
 Other Misconduct ---
20
2.9
 Penalty for falsely claiming to be a member etc ---
30
2.10
 Maintenance of Branch Offices ---
31
2.11
 Procedure with regard to noting by the Institute of retirement of partner(s) of a firm ---
33
3
 Authority attached to the documents issued by the Institute ---
35
 
 - Statements ---
36
 
 - Accounting Standards and Auditing & Assurance Standard ---
38
 
 - Guidance Notes ---
60
4
 Schedules to the Act ---
61
4.1
 THE FIRST SCHEDULE
 
PART I

Professional Misconduct in relation to Chartered Accountants in Practice

 		  
 
 
 Clause (1) - Practising member prohibited from allowing any person other than his partner or employee to practise in his name ---
61
 
 Clause (2) - Practising member prohibited to pay or allow any share, commission or brokerage or profits of his professional business, to any person other than a member of the Institute or a partner or retired partner or the legal representative of deceased partner ---
62
 
 Decided cases under Clause (2) ---
66
 
 Clause (3) - Practising member prohibited to accept or agreeing to accept any part of the profits of the professional work of lawyer, auctioneer, broker or other agent who is not a member of the Institute ---
66
 
 Clause (4) - Practising member prohibited to enter into partnership with any person other than a practising member or members of recognised foreign professional bodies ---
67
 
 Decided cases under Clause (4) ---
69-70
 
 Clause (5) - Practising member prohibited from securing professional business through person not qualified to be his partner or by means not open to him ---
70
 
 Decided cases under Clause (5) ---
70
 
 Clause (6) - Practising member prohibited from soliciting clients or professional work by circular, advertisement, personal communi- cation or interview or by any other means ---
70
 
 (a) Advertiement and Notes in the Press ---
71
 
 (b) Application for empanelment for allotment of audit and other professional work ---
72
 
 (c) Publication of name or Firm Name by Chartered Accountants in the Telephone or other Directories published by Telephone Authority or Private Bodies ---
73
 
 (d) Responding to Tenders, Advertisements and Circulars  
74
 
 (e) Issuing Hand Bills ---
76
 
 (f) Publication of Books or Articles ---
76
 
 (g) Issue of greeting cards or invitations ---
76
 
 (h) Soliciting Professional work by making roving enquiries ---
76
 
 (i) Seeking work from professional colleagues ---
76
 
 (j) Scope of representation which an auditor is entitled to make under Section 225(3) of the Companies Act, 1956 ---
77
 
 (k) Acceptance of original professional work by a member emanating from the client introduced to him by another member ---
77
 
 (l) Giving public interviews ---
77
 
 (m) Members and/or firms who publish advertisements under box numbers ---
77
 
 (n) Website ---
77
 
 Decided Cases under Clause (6) ---
82-93
 
 Clause (7) - Practising member prohibited from advertising his professional attainments or services or using any designation or expressions other than chartered accountant on professional docu- ments, visiting cards or sign board, except permitted degree or title ---
93
 
 Decided Cases under Clause (7) ---
99-103
 
 Clause (8) - Practising member prohibited from accepting a position previously held by another chartered accountant without first communicating with him in writing ---
103
 
 Decided Cases under Clause (8) ---
109-125
 
 Clause (9) - Practising member prohibited from accepting an appoint- ment as auditor of a company without first ascertaining from it whether the requirements of Section 225 of the Companies Act, 1956 in respect of such appointment have been duly complied with ---
125
 
 Decided Cases under Clause (9) ---
141-151
 
 Clause (10) - Practising member prohibited from charging or offering to charge, accepting or offering to accept in respect of any professional employment fees which are based on a percentage of profits or contin- gent upon the findings, or results of such employment, except permitted by the regulations ---
151
 
 Regulation 192 - Restriction on fees ---
151
 
 Decided case under Clause (10) ---
152
 
 Clause (11) - Practising member prohibited from engaging in any business or occupation other than the profession of chartered accountants unless permitted by the Council so to engage, except being a director of a company, unless he or any of his partners is interested in such company as an auditor ---
152
 
 Regulations  
 
 
 190A Chartered Accountant in practice not to engage in any other business or occupation ---
153
 
 191 Part-time employments a Chartered Accountant in practice may accept ---
153
 
 Appendix (9) - Chartered Accountants Regulations, 1988 (2002 edu.) ---
153
 
 (A)Permission granted generally ---
153
 
 (B) Permission to be granted specifically ---
154
 
 - Director of a Company ---
158
 
 - Promoter/Promoter-Director ---
159
 
 Decided Cases under Clause (11) ---
159-171
 
 Clause (12) - Practising member prohibited from accepting a position as auditor previously held by some other chartered accountant in such conditions as to constitute under- cutting ---
171
 
 Decided Cases under Clause (12) ---
171-174
 
 Clause (13) - Practising member prohibited from allowing a person not being a member of the Institute or a member not being his partner to sign on his behalf or on behalf of his firm, any balance-sheet, profit and loss account, report or financial statements ---
174
 
PART II
 		    
 
 Professional Misconduct in relation to Members of the Institute in Service ---
176
 
 Clause (a) - Member in employment of a company, firm or person prohibited from paying or allowing or agreeing to pay or allow directly or indirectly to any person any share in his emoluments ---
176
 
 Clause (b) - Member in employment of any company, firm or person prohibited from accepting or agreeing to accept any part of fees, profits or gains from a lawyer, a chartered accountant or broker engaged by such company, firm or person or agent or customer of such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification ---
176
 
 Clause (c) - Member in employment of any company, firm or person prohibited from disclosing confidential information acquired in the course of his employment except as and when required by law or except as permitted by the employer ---
176
 
PART III
 		  
 
 
 Professional Misconduct in relation to Members of the Institute Generally ---
177
 
 Clause (1) - Member prohibited from including in any statement, return or form to be submitted to the Council any particulars knowing them to be false ---
177
 
 Clause (2) - Member prohibited from styling as a fellow without being so ---
177
 
 Clause (3) - Member to supply the information called for, or comply with the requirements asked for, by the Council or any of its Committees ---
177
 
 Decided Cases under Clauses (1) to (3) ---
177-185
4.2 THE SECOND SCHEDULE
 
 
 PART I
 		    
 
 Professional Misconduct in relation to Chartered Accountants in Practice requiring action by a High Court ---
186
 
 Clause (1) - Practising member prohibited from disclosing information acquired in the course of his professional engagement to any person other his client, without the consent of his client or otherwise than as required by any law for the time being in force ---
186
 
 Role of Chartered Accountants in relation to unlawful acts by their clients ---
188
 
 Decided cases under Clauses (1) ---
191-193
 
 Clause (2) - Practising member prohibited from certifying or submitting in his name or in the name of his firm a report of an examination of financial statements unless the examination of such statements and the related records has been made by him or by a partner or an employee in his firm or by another chartered accountant in practice ---
193
 
 Decided case under Clauses (2) ---
195-196
 
 Clause (3) - Practising member prohibited from permitting his name or the name of his firm to be used in connection with an estimate of earnings contingent upon future transactions in a manner which may lead to the belief that he vouches for the accuracy of the forecast  
196
 
 Clause (4) - Practising member prohibited from expressing his opinion on financial statements of any business or any enterprise in which he, his firm or a partner in his firm has a substantial interest, unless, he discloses the interest also in his report ---
197
 
 (1) Where the member, his firm or his partner or his relative has substantial interest in the business or enterprise  
 
 (i) An enterprise/concern of a member is either an owner or a partner ---
199
 
 (ii) Where the partner or relative of a member has substantial interest ---
199
 
 (2) Where the member or his partner or relative is a director  
 
 (i) Where a member is a director ---
200
 
 (ii) Where a partner or relative of the member is a director in the Company who has a substantial interest ---
200
 
 Decided case under Clauses (4) ---
201-202
 
 Clause (5) - Practising member to disclose a material fact known to him which is not disclosed in a financial statement, but disclosure of which is necessary to make the financial statement not misleading ---
202
 
 Decided Cases under Clause (5) ---
203-205
 
 Clause (6) - Practising member to report a material mis-statement known to him to appear in a financial statement with which he is concerned in a professional capacity ---
205
 
 Decided Cases under Clause (6) ---
206-208
 
 Clause (7) - Practising member to be vigilant in the conduct of his professional duties ---
208
 
 Decided Cases under Clause (7) ---
209-230
 
 Clause (8) - Practising member to sufficient information to warrant the expression of an opinion or his exceptions are sufficiently material to negate the expression of an opinion ---
230
 
 Decided Cases under Clause (8) ---
233-238
 
 Clause (9) - Practising member to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances ---
238
 
 Decided Cases under Clause (9) ---
239-241
 
 Clause (10) - Practising member to keep moneys of his client in a separate banking account or to use such moneys for purposes for which they are intended ---
241
 
 Decided Cases under Clause (10) ---
242-244
 
PART II
 		  
 
 
 Professional Misconduct in relation to Members of the Institute generally requiring action by a High Court ---
245
 
 Clause (i) - Member not to contravene any of the provisions of the Chartered Accountants Act, 1949 and the regulations made thereunder ---
245
 
 Decided Cases under Clause (i) ---
246-253
Clause (ii) - Members to always keep in view the various acts or am mission which have been specified by the Council in exercise of power conferred on it under the clause ---
253
 
 Notifications issued by the Council under Clause (ii) Part II, Schedule II ---
254-267
5
 Recommended Self-Regulatory Measures ---
268
5.1
 Recommended scale of fee chargeable for the work done by the Members of the Institute ---
270
6
 Appendices A, B, C, D & E ---
271-286
7
 Index of Decided Cases ---
287
8
 Subject Wise Index ---
300
 
Note : For details, please see the published text