CODE OF ETHICS

CODE OF ETHICS

Code of Ethics shall always be same whether the auditor is a Chartered accountant or any other person. Generally, GST audit is carried out by a Chartered Accountant, keeping in mind this thing, I have drafted the below written points.

1. Institute’s disciplinary jurisdiction will prevail - The liability of the GST auditor in respect of GST audit will be the same as in any other audit assignments. Chartered Accountants are answerable to the Central Council formed under ICAI rules and regulations. In all matters concerning GST audit, Institute’s disciplinary jurisdiction will prevail.
2. Responsibility of GST auditor if Dealer is found guilty - If the Officer authorized under GST Act comes to the conclusion that the GST auditor was grossly negligent in the performance of his duties, he can refer the matter to the Institute so that appropriate action can be taken against the GST auditor under the Chartered Accountants Act.

3.  Officer can call GST auditor – Officer authorized can call the GST auditor who has audited the accounts to give any evidence or produce documents on which he has relied upon before certifying the specified form of the dealer. Howsoever Chartered Accountant is under no obligation to give his working papers on which he has relied upon before certifying the specified form of the dealer.

If the actual work relating to the examination of books and records is done by a qualified assistant in a firm of chartered accountants and the partner of the firm signing the audit report has relied upon his work, action, if any, for professional negligence can be initiated against the member who has signed the report and in such an event, it would be open for the member concerned to prove that he has taken due care and diligence in the performance of his duties and is not aware of any reason to believe that he should not have so relied. If the qualified assistant (whether or not holding the certificate of practice) is found to be grossly negligent in the performance of his duties, the Institute can take disciplinary action against the qualified assistant

• Fee for Audit - Under the COE, GST auditor cannot charge professional fees by way of percentage of turnover or percentage of profits.

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.

Particulars	Revised with effect From 1-4-2000
A. For giving expert evidence in courts of law in the Union of India according to professional standing of the witness	Rs. 5,000                       to Rs. 10,000 (For each day or part thereof spent in attendance and/or traveling)
B. Other work: (a) Statutory Audit, Tax Audit, Internal Audit, Accountancy   and Secretarial            Work carried out by : Ø  Principal         Ø  Qualified Assistants Ø  Semi Qualified/Other Assistants	600(per hour) 300(per hour) 100(per hour)	1200(per hour) 600(per hour) 200 (per hour)
(b) Taxation Work carried out by : Ø  Principal         Ø  Qualified Assistants Ø  Semi Qualified/Other Assistants	1000(per hour) 500(per hour) 200(per hour)	2000(per hour) 1000(per hour) 400 (per hour)
(c) Investigation, Management Services or Special Assignments carried out by : Ø  Principal         Ø  Qualified Assistants Ø  Semi Qualified/Other Assistants	1500(per hour) 750(per hour) 250(per hour)	3000(per hour) 1500(per hour) 500 (per hour)

Note: 1. Office time spent in travelling would be chargeable. In case of outstation work, travelling and out-of-pocket expenses would also be chargeable.

2. The Council issues for general information the above revised recommended scale of fees which it considers reasonable under present conditions. It will be appreciated that the actual fees charged in individual cases will be a matter of agreement between the member and the client.

5. Accepting Audit for Lesser Fee[1]

Member of the Institute of Chartered Accountants of India shall be deemed to be guilty of professional misconduct, if he on behalf of the firm of chartered accountants in which he is a partner accepts or carries 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:

Sr. No.	Particulars	Practicing firm having 4 or more partners but less than 8 partners	Practicing firm having 8 or more partners
(i)	In cities with population of 2 million and above	Rs. 5,000/ p.a.	Rs. 9,000/ p.a.
(ii)	In cities/towns having populations of less than 2 million	Rs. 3,000/ p.a.	Rs. 6,000/ p.a.

However that such restriction shall not apply in respect of the following:

• Audit of accounts of charitable institutions, clubs, provident funds, etc. where the appointment is honorary i.e. without any fees;
• Statutory audit of branches of banks including regional rural banks;
• audit of newly formed concerns relating to two accounting years from the date of commencement of their operations; and
• certification or audit under Income-tax Act or other attestation work carried out by the Statutory Auditor.

For the purpose of this notification, the expression statutory auditor means and includes a chartered accountant appointed as an auditor under a Central/State or Provincial Act as well as an auditor appointed under any agreement.

6      GST auditor next to assessing authority –

While conducting GST audits, figures    declared by the dealer are duly verified by the GST auditor, the tax authorities are expected to accept the figures certified by the GST auditor. If there is a specific reason for differing with the figures determined by the GST auditor, the tax authorities may re-compute the tax liability.

However, opinion expressed by the GST auditor is not binding on the dealer. If the GST auditor has qualified his report and expressed an opinion on a particular item, the dealer may take a different view and may not take steps on the advice given by the GST auditor. 

7     Interest of GST Auditor

In case a member is a director of a company, the financial statements of which are to be audited and/or opinion has to be expressed, he should not undertake GST audit of that company.

Section 226 of the Companies Act, 1956 specifically prohibits a member form auditing accounts of a company in which he is a director or an employee of the company or in the employment of an officer of the company. Although the provisions of the aforesaid section are not specifically applicable in the context of audits performed under other statutes, e.g. GST audit, the underlying principle of independence is equally applicable. However, where a member undertakes GST audit of such a business or enterprise, he should disclose his interest while expressing an opinion.

Holding of substantial interest by a partner or a relative[2] of the member in the business or enterprise of which an audit has to be carried out and opinion has to be given on the financial statements, may affect the independence of the member, in the performance of his professional duties. Therefore, a member may, not to compromise his independence, desist from undertaking the GST audit of such business or enterprise.

[1] Notification No. 1-CA/ (7)/ 75/ 2004 dated 12the May, 2004

[2] “Relative means the spouse, brother or sister or any lineal ascendant or descendent of the member. Please refer to the definition of “Relative” given in Appendix (9) to the Regulations, 1988.

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