The Exposure Draft on the Code of Ethics, 2018 released by the Institute of Chartered Accountants of India ( ICAI ) points out that the charging of fee which is too low comparing to other professionals and the act of offering or accepting gifts by the Chartered Accountants would amount to the breach of Ethics.
The Exposure draft is now released for comments from the stakeholders, and once finalized, it will be applicable with effect from 1st April, 2019.
This Code has been derived from the International Ethics Standards Board for Accountants (IESBA) Code of Ethics, 2018 issued by the International Federation of Accountants (IFAC).
“A professional accountant shall not offer, or encourage others to offer, any inducement that is made, or which the accountant considers a reasonable and informed third party would be likely to conclude is made, with the intent to improperly influence the behaviour of the recipient or of another individual,” the Code said.
With regard to the charging of fee, it said that “A professional accountant might quote whatever fee is considered appropriate. Quoting a fee lower than another accountant is not in itself unethical. However, the level of fees quoted creates a self-interest threat to compliance with the principle of professional competence and due care if the fee quoted is so low that it might be difficult to perform the engagement in accordance with applicable technical and professional standards.”
“The proposed Code is based on the 2018 edition of Code of Ethics issued by the International Ethics Standards Board for Accountants (IESBA), with necessary changes to bring it in line with our jurisdictional requirements. As you may be aware, the new IESBA Code contains changes pertaining to drafting conventions, stricter independence requirement for public interest entities, responding to non-compliance with laws and regulations, provisions pertaining to breach of independence requirements of the Code, and the changes in partner rotation, among others. Revised Code of Ethics will be issued by ICAI after considering the suggestions and feedback received from various stakeholders,” ICAI Chief CA Naveen N D Gupta said.
