Penalties ICAI Can Impose Over Misconduct By a CA
The Institute of Chartered Accountants of India holds the authority to impose certain penalties on CAs who do not comply with the Code of Ethics issued by the institute. The penalties imposed in accordance with the misconduct carried out by a CA are further listed in the article.
Table of Content
- First Schedule (Less severe)
- Second Schedule (Severe)
First Schedule (Less severe)
1. Issue of Misconduct: Allowing Non-Qualified Practice.
- Description: Permitting non-CAs to practice in CA’s name or sharing fees.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000, suspension of up to 3 months.
2. Issue of Misconduct: Improper Fee Arrangements.
- Description: Paying or accepting commissions or brokerage beyond ICAI rules.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000.
3. Issue of Misconduct: Using Another CA’s Attestation.
- Description: Certifying reports prepared by another CA.
- Potential Penalties: Reprimand, fine up to Rs. 1,00,000.
4. Issue of Misconduct: Unethical Solicitation.
- Description: Soliciting clients via WhatsApp or other prohibited means.
- Potential Penalties: Reprimand, fine up to Rs. Rs.1,00,000.
5. Issue of Misconduct: Conflicting Engagements.
- Description: Accepting assignments conflicting with existing ones without consent.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000.
6. Issue of Misconduct: Certification Without Due Diligence.
- Description: Issuing reports without proper verification.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000, suspension of up to 3 months.
7. Issue of Misconduct: Failure to Register.
- Description: Practising without a valid Certificate of Practice.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000.
8. Issue of Misconduct: Negligence.
- Description: Failing to exercise due care in audits or filings.
- Potential Penalties: Reprimand, fine up to Rs.1,00,000.
9. Issue of Misconduct: Violating ICAI Guidelines.
- Description: Non-compliance with Code of Ethics (e.g., unapproved business).
- Potential Penalties: Reprimand, fine up to Rs.1,00,000.
Second Schedule (Severe)
- Issue of Misconduct: Falsification of Documents.
- Description: Signing false or misleading financial statements.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal (High Court approval for less than 5 years).
2. Issue of Misconduct: Fraud/Misrepresentation
- Description: Engaging in or aiding fraudulent activities.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or permanent removal.
3. Issue of Misconduct: Failure to Report Irregularities.
- Description: Not reporting material misstatements in audits.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
4. Issue of Misconduct: Gross Negligence.
- Description: Severe negligence causing significant consequences.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
5. Issue of Misconduct: Collusion with Clients
- Description: Assisting in illegal activities (e.g., tax evasion).
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
6. Issue of Misconduct: Non-Compliance with Standards.
- Description: Ignoring Accounting/Auditing Standards.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
7. Issue of Misconduct: Prohibited Services.
- Description: Providing non-audit services to audit clients, violating independence.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
8. Issue of Misconduct: Criminal Convictions.
- Description: Conviction involving moral turpitude.
- Potential Penalties: Suspension or permanent removal.
9. Issue of Misconduct: Bringing Disrepute.
- Description: Actions tarnishing the profession’s reputation.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
10. Issue of Misconduct: Non-Disclosure of Conflicts.
- Description: Failing to disclose interests affecting independence.
- Potential Penalties: Fine up to Rs.5,00,000, suspension, or removal.
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