It is an Act enacted by Parliament w.e.f. 1st July 1949 — as amended by Chartered Accountant (Amendment) Act, 2006 for the regulation of the profession of Chartered Accountancy in India. The regulation is exercised through the Institute of Chartered Accountants of India. For the management of the affairs and for discharging the functions assigned to it by the Act, there is a Council of the Institute.

The Act has eight chapters, which deal with provisions relating to membership of the Institute, Council and Regional Councils, misconduct, penalties, power to make various regulations, etc.

The Act also has two Schedules relating to professional misconduct.

By virtue of Section 30 of the Chartered Accountants Act, 1949, the Council of the Institute has made regulations, which are called the Chartered Accountants Regulations, 1988. The same came into force from 1st June, 1988 and have been amended from time to time. The Council has issued guidelines for the members pursuant to the provisions of the Chartered Accountants Act, 1949. Important aspects of these guidelines have been suitably covered under appropriate heads the Chartered Accountants Regulations, 1988

Some of the important regulations relevant for members and students are given herein below:

The applicant should have:

1. Completed the prescribed period of practical training

2. Passed the final C.A. Examinations;

3. Has attained twenty one years of age

4. Undergone course on General Management and Communication Skills (Applicable to candidates passing Both Groups of Final C.A. Examinations held in May 2003 and thereafter).

The Chartered Accountants Regulations, 1988 with regard to the eligibility to train the articled assistants has been amended vide Notification dated 17th August, 2007 and as per the amended Regulations, the eligibility of practicing member to train articled assistant(s) is as under.

(Applicable to members practicing the profession of chartered accountants in his individual name or as proprietor or as partner)

(Applicable to members who are in full time salaried employment under a chartered accountant in practice or a firm of such chartered accountants)

Stipend payable would be as under:

Sr.No.	Classification of the normal place of the  service of the articled assistant	During the first  year of training	During the second  year of training	During the remaining  period of training
(i)	Cities/towns having a population of twenty lakhs and above	Rs. 1000	Rs. 1250	Rs. 1500
(ii)	Cities/towns having a population of above four lakhs but less than twenty lakhs	Rs. 750	Rs. 1000	Rs. 1250
(iii)	Cities/towns having a population of less than four lakhs	Rs. 500	Rs. 750	Rs. 1000

A weekly record of practical training of the Articled/Audit Clerks is required to be maintained, specifying the areas in which the articled clerk has obtained work experience and a report of the practical training is to be enclosed with Form 108/109, in cases of completion/termination.

From April, 2010 no condonation will be given for delay in Submission of form 112 by articled/audit clerks pursuing courses than CA. (Sec. Regulations 65 & 78).

No transfer of article clerks allowed w.e.f. 1.5.2009

Students /article clerks have to ensure that coaching classes they join/ attend should not have timing between 9.30 am to 5.30 pm. Such timing is not permissible to students during their training period.

The transfer/termination of articleship in terms of Regulation 56(1) of the Chartered Accountants Regulations, 1988 shall be permissible on the grounds as stated below:—

i. Transfer/termination of articles is permitted without any restriction during the first year of articles.

ii. During rest of the articleship on satisfying any one or more of the conditions as stated below:—

1. Medical grounds requiring discontinuance of articles for a minimum period of three months (on production of a Medical Certificate issued by a Government Hospital).

2. Transfer of parent(s) to any other city.

3. Misconduct involving moral turpitude.

4. Other justifiable circumstances/reasons.

iii. Grounds already permissible in the Chartered Accountants Regulations, 1988 (on submission of requisite proof of the act warranting transfer / termination of articleship).

a. Industrial Training (Regulation 51)

b. Secondment of articles (Regulation 54)

c. Conversion from PCC to IPCC (for termination of articles only. Re-registration of articles to be allowed only after passing Group-I of IPCC)

d. Death of Principal [Regulation 57(1)(c) ]

e. Ceasing of practice by the Principal [Regulation 57(1)(a)]

f. Removal of name of the Principal from the Register of Member due to any reason [Regulation 57(1)(b)]

iv. Marriage basis (only if there is relocation to another city involving distance of 50 kms).

v. Irregular payment or non payment of stipend with reference to Regulation 67.

vi. Articled assistant desires to serve balance period of training outside India.

vii. Shifting by the Principal to another city involving distance more than 50 kms.

The articles assistants are required to get the consent of the Institute before getting Form 109 signed by the Principal.

The request, on any one or more of the aforesaid grounds, of an articled assistant on a plain paper alongwith the recommendation/consent of the Principal for transfer / termination of articleship accompanied by evidence / proof (self-attested by the articled assistant) to the satisfaction of the Institute is required to be made. Request for transfer not accompanied by consent of Principal shall not be accepted by the Institute.

In case of dispute between principal and articled assistant, the matter be settled amicably among the articled assistant and the principal concerned and the Institute shall not interfere in such cases.

• to pay commission/brokerage or share of profits of his professional business to/with any person other than a member of the Institute.

• from soliciting clients or professional work by circular, advertisement etc. except for advertisement as per the guidelines dt.14th May, 2008 issued by the Council

• from being Director of a Holding Company in whose subsidiary he is the auditor.

• from responding to advertisements inviting application for appointment of auditors, tenders or circulars or enquiry (made to more than one member) inviting quotation restricted to CA.

• However members can respond to tenders in the areas where they compete with non CAs. They can also respond to tenders in the audit field outside the country provided the fees are received in foreign currency. The members are permitted to pay a reasonable amount as price for tender/bid document. In general no earnest money / security deposit is permissible in areas which are exclusive to Chartered Accountants as per Law. However, in non-exclusive area the members are permitted to pay earnest money/security deposit. If only Chartered Accountants are invited in non-exclusive area, the members are permitted to pay reasonable amount towards earnest money/security deposit.

• From expressing his opinion on financial statements of any business or enterprise in which one or more persons who are his ‘relatives’ within the meaning of Section 6 of the Companies Act, 1956 have, either by themselves or in conjunction with such member, a substantial interest in the said business or enterprise.

4.2 A Chartered Accountant in practice CANNOT:

• Use any designation other than Chartered Accountant on professional documents, visiting cards, letterheads or signboard. The Council has decided that a member of the institute shall not be permitted to use initials "CPA" (standing for Certified Public Accountant) on his visiting card.

• Charge fees on a percentage of profits or which are contingent upon the findings, or results of such work provided that.

• Engage in any business other than the profession of chartered accountants unless permitted by the Council.

• Accept position as auditor previously held by another chartered accountant without first communicating with him in writing.

• Accept any other work/assignment/service on a remuneration, which exceeds the fees payable for statutory audit of the same undertaking. (Applicable only in respect of statutory audits of public sector undertaking/Govt. Companies/Listed companies/other public companies with turnover of Rs. 50 crores or more in a year for appointments after 1st April, 2002 — Ref: Notification No. 1-CA(7)/60/2002 published in CA Journal-March, 2002 issue).

• Accept or carry out any audit work involving receipt of audit fees (excluding reimbursement of expenses, if any) for such work of an amount less than what is specified hereunder:— (notification No.1-CA(7)/93/2006 published in CA journal on page 652 of October, 2006 issue):

	Cities	Practising firm having 5 or more partners but less than 10 partners	Practising firm having 10 or more partners
(i)	in cities with population of 3 million and above	Rs. 6,000/- p.a	Rs. 12,000/- p.a.
(ii)	in cities /towns with population of less than 3 million	Rs. 3,500/-  p.a.	Rs. 8,000/-p.a.

4.3 A Chartered Accountant should not:

• accept appointment as an auditor of an entity in case the undisputed audit fees of outgoing auditor for carrying out statutory audit has remained unpaid. This is not applicable in case of sick units.

• accept in a financial year, more than forty-five tax audit assignments under Section 44AB of the Income-tax Act, 1961

• accept appointment as Tax Auditor of an entity where he is appointed as Internal Auditor

• accept appointment as auditor of a concern while indebted to the concern or has given a guarantee or provided any security in connection with the indebtedness of any third person to the concern, for limits fixed in the statute and in other cases amount exceeding Rs.10,000.

• accept the appointment as Cost auditor of a company under Section 233B of the Companies Act,1956 while he —

A member cannot accept appointment as Cost Auditor if after his appointment as Cost Auditor he becomes subject to any of the disqualifications stated in points (a) to (e) above .

• Hold at anytime appointment of more than thirty audit assignments of Companies under Section 224 and/or Section 228 of the Companies Act, 1956.

• Accept the appointment as statutory auditor of Public Sector undertaking(s) / Government Company(ies) having turnover of Rs.50 crores or more in a year where he accepts any other work(s) or assignment(s) or service(s) in regard to the same undertaking(s) / Company(ies) on a remuneration which in total exceeds the fee payable carrying out the statutory audit of the same Undertaking / Company however in case appointing authority(ies) / regulatory body(ies) lay down more stringent condition(s) restriction(s), the same shall apply instead of the conditions / restrictions specified under these Guidelines.

The above restrictions shall apply in respect of fees for other work(s) or service(s) or assignment(s) payable to the statutory auditors and their associate concern(s) put together.

• Without following the direction given by the Council or an appropriate committee or on behalf of any of them, accept the appointment as auditor(s), in the case of unjustified removal of the earlier auditor(s)

4.4 A Chartered Accountant in practice CAN

1. Share profits of business or other similar arrangements with certain categories of non-members, to be prescribed, from time to time, in the Regulations.

2. Enter in to multi–disciplinary partnership, in or outside India, with certain categories of non-members, to be prescribed, from time to time, in the Regulations.

3. The members can use the Logo (released by the Institute on 1st July, 2007) which consists of the letters ‘CA’ and a tick mark upside down inside a rounded rectangle with white background. (members can use this Logo as per Institute’s guideline available on its website/Refer The CA Journal July, 2007).

4. Advertise through a write up setting out their particulars of their firms and services provided by them subject to the Guidelines No. 1–CA(7)/council guidelines/01/2008, dated 14th May, 2008 issued by the Council pursuant to Clause (7) of Part I of the First Schedule to the Chartered Accountants Act, 1949. (Refer The CA Journal July, 2008 for the detailed guidelines).

5. Give his name and his firms name under specified groups in telephone directory viz., Yellow Pages brought by telephone authorities.

6. Use the designation ‘C.A.’ as well as the name of the firm in greeting cards and invitation cards

7. Be a director simpliciter in a company without permission of the Council.

8. Be a promoter director in a company without prior permission of the Council.

9. Render Management Consultancy and Other Services in Corporate form, subject to the guidelines issued by the Institute in this regard. (Decision in the 261st Council meeting. Published on page 629 of October 2006 issue of C.A. Journal).

10. Create his own website subject to overall guidelines laid down by the Council and should ensure that their websites are run on a "pull" and not "push" method.

11. The members of ICAI who are also members of AICPA and are eligible to sign the financial statements as CPAs (i.e., as members of the AICPA), may do so. So far as ethical standards are concerned, the ICAI ethical standards will apply. When the ICAI members sign the financial documents as CPAs, they should indicate in an appropriate manner, that their firm is an Indian accounting firm registered with the Institute of Chartered Accountants of India under the Chartered Accountants Act, 1949 (Decision in the 257th Council meeting. Published on page 145 of July 2006 issue of C.A. Journal).

• Firm registration number allotted by ICAI is required to be mentioned in the audit report and certificate issued by the Firm/ member.

• Resolution regarding appointment of statutory auditors should bear Firms registration number.

• Indian CA firms having tie up/affiliation with international entities/network to furnish certain documents/details to the Institute (For details refer ‘The Chartered Accountant’, November 2010 issue page 805). In case, the Institute comes to know of any firms which have international tie-up/affiliation, but yet had not come forward to disclose the same and submit the documents/details called for, then necessary action under the provisions of the Chartered Accountants Act, 1949 shall be taken against them.

• Maintenance OF RECORD OF AUDIT ASSIGNMENTS

1. Branch Audits of a Company not to be conducted by its statutory auditors consisting of ten or more members but to be entrusted to local firm of auditors consisting of less than 10 members except where accounting records of branches are maintained at the Head Office of the Company or significant operations are carried out at the branch office.

2. Where large Companies desire to appoint firm with less than five partners as joint auditors, the senior audit firms should not object to the same.

3. A practising firm of CAs engaged in audit work should have at least one member for five non-qualified members of the staff, excluding articled clerks, typists, peons and other persons not engaged directly in such professional work.

4. As a good and healthy practice, auditors should make a disclosure of payments received by them for other services through the medium of a different firm or firms in which the said auditor may be either partner or proprietor.

5. To ensure professional independence, fees for audit and other services received by a firm, its partners individually and by any other firm in which a partner or partners are partners, from one or more clients or companies under same management should not exceed 40% of the gross annual fees of firm, other firms and partners referred above. This restriction does not apply in cases where such fees do not exceed Rs. 2 lakhs from the group or where fees relate to audit of government companies or where appointment is made by the Government.

The Council of the Institute of Chartered Accountants of India recommends from time to time scale of fees chargeable for the work done by the member of the Institute. Such scale of fees was last revised by the Council at its meeting held in January, 2006, effective from 12th May, 2006.

			Minimum	Up to & above
1.	For giving expert evidence in courts of law in the Union of India to professional standing of the witness.		7,500 per day or part thereof	15,000 per day or part thereof
2.	Other work
	a)	Statutory Audit, Tax Audit, Internal Audit, Accountancy and Secretarial work.
		Principal	900 per hour	1,800 per hour
		Qualified Assistants	450 per hour	900 per hour
		Semi-Qualified/Other Assistant	150 per Hour	300 per hour
	b)	Taxation work.
		Principal	1,500 per hour	3,000 per hour
		Qualified Assistants	750 per hour	1,500 per hour
		Semi-Qualified/Other Assistants	300 per hour	600 per hour
	c)	Investigation, Management Services or Special Assignment
		Principal	2,250 per hour	4,500 per hour
		Qualified Assistant	1,125 per hour	2,250 per hour
		Semi-Qualified/Other Assistant	375 per hour	750 per hour

The Chartered Accountants’ Benevolent Fund was established in December, 1962 with the object of providing financial assistance for maintenance, education and other similar purposes to needy persons being members of the Institute of Chartered Accountants of India, their wives, widows, children and dependant relatives. The income from the fund is utilized in giving financial assistance to members and their families in distress.

• The Council has decided that the members in part time practice shall not be entitled to perform attest function w.e.f. 1-4-2005. The Council in this connection also clarified that the attest function would cover services pertaining to audit, review, certification, agreed upon procedures and compilations as defined in the framework of statements on standard auditing practices and guidance notes on related services published in the July, 2001 issue of the Institute journal. The Council has also decided that a member in practice despite being a partner in firm within India and also employed outside the country may be permitted to undertake attest functions outside India so long as the said member remains outside India and during such stay abroad, his/her status also continues to be "2" in the Institute’s record.

• A member who is not entitled to perform attest function shall not be entitled to train the articled assistants.

The Council has accepted the report of the study group on capacity building measures of CA firms. The report as accepted has been hosted in the website of the Institute under the title "Capacity building measures 2004". The Council has also decided the rules of network amongst the firms registered with ICAI, rules of merger and demerger, etc. The Council has also decided that while, in the constitution certificate, the actual date(s) of (joining of partner)(s)) the merging firm(s) would continue to be the respective date(s) of joining the merged firm, however, against each such entry the clarificatory words "deemed date of joining" should be mentioned without fail. The principles of seniority and choosing the name of merged firm will be effective in respect of all mergers of CA firms which have taken place from April 2005 onwards. Members holding COP and practising on full time basis without-any break and practicing in individual name (without using any firm/trade name) are also allowed the benefit of merger.

The CPE Credit Requirements for the rolling period of three years starting from the calendar year 2008 is as given below:

For detailed note on CPE requirement refer____

From June 2010 as per the recent amendment to Listing Agreement of the Stock Exchange with respect to submission of limited review/ statutory audit report by the auditors on quarterly results.  the auditors who submit such limited review/ statutory audit report is required to hold valid certificate issued by the Peer Review Board of the Institute.