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MCQ Self Challenge #0088 on Professional Misconduct as per Chartered Accountants Act 1949

 

Professional Misconduct as per Chartered Accountants Act 1949

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical professional on Professional Misconduct as per Chartered Accountants Act 1949 knowledge on in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 88.1: Mr. X, A chartered Accountant in practice accepts an Audit in respect of Partnership Firm, on condition that the partnership firm shares 5% of the profits of the firm for that year. On the basis on above which of the following is correct?

A. Mr. A can accept the professional work and his fees can be on the based on profits of firm.
B. Mr. A is guilty of professional misconduct and cannot place such condition.
C. Mr. A can accept a maximum of 5%.
D. None of the Above.

MCQ 88.2: If in the above case Mr. X acts as a registered valuer for the purposes of Direct Taxes & Duties and charges fees on basis of percentage of value of property valued. Which of the following is correct?

A. Mr. A can accept the professional work and his fees can be on the based on percentage of property valued.
B. Mr. A is guilty of professional misconduct and cannot place such condition.
C. Mr. A can accept a maximum of 5% of property valued.
D. None of the Above.

Sincere Regards

CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge #0088

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on provisions relating to professional misconduct in relation to members generally.

 

Answer MCQ 88.1: B) Mr. A is guilty of professional misconduct and cannot place such condition

 

Answer MCQ 88.2: A) Mr. A can accept the professional work and his fees can be on the based on percentage of property valued.

 

Practical Analysis for MCQ 88.1 & 88.2:

 

Regulation No 92 of Clause (1) of First Schedule of Part –II to Chartered Accountants Act 1949 – Professional misconduct in relation to the members of the Institute Generally

 

  • No chartered Accountant in practice shall charge or offer to charge, accept or offer to accept, in respect of any professional work, fees which are based on percentage of profits, or which are contingent upon findings or results of such work provided that
    • In the case of Receiver or a liquidator, the fees may be based upon the percentage of the realisation or Disbursement of Assets.
    • In case of Auditor of Cooperative Society, the fees may be based on the basis of percentage of paid up capital or the working capital or cross or net Income of Profits.
    • In the case of Valuer for the purposes of Direct Taxes & Duties, the fees may be based on the percentage of property valued.

 

  • Based on the above analysis, Correct answer to MCQ 88.1: B) A Ltd is not related to C ltd and MR X is related party to A Ltd and C ltd and correct answer to MCQ 88.2: A) A can accept the professional work and his fees can be on the based on percentage of property valued.

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

Webpage: http://www.casanjay.me/

Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/

Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/

 

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