CODE OF ETHICS - ESB

1 code OF ETHICS (Volume II) Issued by The Institute of Chartered Accountants of India (Set up by an Act of Parliament) New Delhiii All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission, in writing, from the publisher. THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA First edition : November 1963 Second edition : September 1966 Third edition : February 1969 Fourth edition : August 1971 Fifth edition : October 1976 Reprinted : 1979 Sixth edition : December 1980 Reprinted : 1981 Reprinted : 1984 Seventh edition : 1985 Reprinted : 1987 Eighth edition : 1988 Reprinted : 1995 (with certain amendments as per page nos.)

2 87 to 93) Reprinted : 1996, 1997, 1998, 1999 Ninth edition : January 2001 Reprinted : 2003 Tenth edition : January 2005 Eleventh edition : January 2009 Reprinted : May 2009 Reprinted : December 2010 Twelfth edition (Vol-II) : May 2020 (Volumes I & III separately issued) ISBN : 978-81-8441-180-5 Price : Rs. 210 Published by : The Publication Department on behalf of Shri Rakesh Sehgal, Acting Secretary, The Institute of Chartered Accountants of India, Indraprastha Marg, New Delhi -110002 Printed by :iii FOREWORD TO THE TWELFTH EDITION The people in different walks of life have different perceptions of ETHICS which may not necessarily be uniform.

3 Generally, feelings, religious dogmas & social norms affect an individual s perception on ETHICS to a certain extent. However, there is a point of concurrence of various schools of thought that ETHICS consists of norms for conduct that distinguish between generally acceptable and unacceptable behaviour. Professional ETHICS is of course a more specialized and tempered one, where one has does not only have an obligation to address the various expectations well, but also to ensure that he does never waive off the requirements applicable to him. The Institute has been a forerunner in formulation and compliance with the contemporary professional standards. It is in this line of its philosophy that it endeavours to live upto the commitment of a constant compliance with the best professional standards acceptable.

4 The code of ETHICS for the profession is indeed one of those standards. It needs to be dynamic to cater to requirements of the changing times and accordingly, it undergoes the revision and evolution, as much as necessary. It is worth recalling that the Eleventh Edition of code of ETHICS (2009) was unique in the sense it adopted the provisions of International Federation of Accountants (IFAC) code of ETHICS for the first time. Further, the code of ETHICS (Volume I) issued in 2019 was the first such edition which was based only on the basis of provisions of International ETHICS Standards Board for Accountants (IESBA) code of ETHICS . At that time, the Volume based on domestic provisions was not issued.

5 This is the Volume II of the Twelfth Edition, based on domestic provisions governing the Chartered Accountants. This complements the Volume I, and makes a complete reading. Volume II brings many changes in the code without change in the basic philosophy governing the profession and seeks to balance the aspirations of stakeholders. Ethical Standards Board of ICAI has collectively put in lots of efforts in bringing this revised publication. I complement the efforts of all members and special invitees of Ethical Standards Board for their valuable contribution. In particular, I appreciate of CA. Ranjeet Kumar Agarwal, Chairman and CA. Kemisha Soni, Vice-Chairperson, Ethical standards Board, for their tireless efforts and determination.

6 I also appreciate the efforts and contribution of iv Shri Ashish Swaroop Bhatnagar, Secretary, Ethical Standards Board and entire Secretariat of the Board in bringing out this publication. I am really hopeful that this publication will mark an important milestone, and meet the objectives of its release. New Delhi PRAFULLA P. CHHAJED 7th February, 2020 President v PREFACE TO THE TWELFTH EDITION The Institute brought the First edition of the code of ETHICS for members, then code of Conduct in November, 1963. The said edition included not only the provisions of the Chartered Accountants Act, 1949 (Act) , but also the interpretation of the Council, and pronouncements of various High Courts and the Supreme Court. It may be noted that the Act itself, along with the two Schedules to the Act set out norms for permissible activities for the members of the profession.

7 Section 22 of the Act defines and describes what constitutes `Professional Misconduct . The two Schedules describe in detail the various acts and omissions entailing professional/other misconduct, which are dealt with punishment in accordance with Chapter-V of the Act. The Disciplinary mechanism of the Institute is provided in the Act, and thus with the sanction of law behind, it has effectively been followed since the enactment of the Act without any difficulty. We herewith present the Twelfth Edition of code of ETHICS which has been revised and aligned with the International ETHICS Standards Board for Accountants (IESBA) after a gap of ten years. In this Twelfth edition, we have tried to incorporate all domestic provisions relating to code of ETHICS , along with all Council/Committee decisions of last ten years viz.

8 Tender Guidelines Corporate Form of Practice Guidelines Logo Guidelines UDIN Guidelines Networking Guidelines Revised Advertisement Guidelines And all relevant Council and Board decisions. We have also tried to segregate all important case laws related to Schedule - I and II of the Chartered Accountants Act, 1949 in a separate Case Laws Referencer as Volume III of code of ETHICS , for easy reading and understanding. The Referencer has been further enriched with appropriate sub-titles and numbering of the disciplinary case laws. vi We thank the President CA. Praffula P. Chhajed , Vice President CA. Atul Gupta and all Council colleagues for their cooperation, support in bringing out this long pending revised code of ETHICS .

9 We also thank all members of Ethical Standards Board (CA. Hegde, CA. Anil S. Bhandari, CA. Yeshawant S. Joshi, CA. Babu A. Kallivayalil, CA. Rajendra Kumar P., CA. Pramod K. Boob, CA. Pramod Jain, CA. Aniket Talati, CA. Hans Raj Chugh, Ms. Ritika Bhatia and Dr. Ravi Gupta) , Co-opted members (CA. Satish Chaturvedi, CA. Rajnish Luniya, CA. Viraf Mehta, CA. Puneet Oberoi and CA. Mukesh Ramdas Hundiwala) and special Invitees (CA. Sanjiv Kumar Chaudhary, CA. Sunil Bajaj and CA. Pardeep Pal) , with particular reference to CA. Sanjiv Kumar Chaudhary, member , IESBA. The revised code of ETHICS (Volume-I, II and III) will be applicable from 1st July, 2020 as decided by the Council at its 388th Meeting held on 6th and 7th February, 2020.

10 Till then, the existing code of ETHICS (2009 edition) will remain applicable. We are hopeful that this publication will be act as a complementary guide to the members to help them acting in compliance with the provisions of code of ETHICS . New Delhi RANJEET KUMAR AGARWAL 7th February, 2020 Chairman Ethical Standards Board KEMISHA SONI