Answer the following: (5 Marks each December 2011)
a) Mr. Shushil Maharjan, a Chartered Accountant published a book and gave his personal details as the author. These details also mentioned his professional experience and his present association as partner with M/s Daniel Brisk, a Swedish firm of Chartered Accountant Firm. What will be your opinion in this respect?
b) Mr. Shanti Das a Chartered Accountant audited a religious institution established for purely promoting social values without charging any audit fee. Give your comment.
a) The supplementary Directive to code of ethics issued the Institute of Chartered Accountants of Nepal on “Publicity and Advertisement” prescribes the provisions for publishing book or article. It allows the members to state their name, professional qualification and the name of their firms but restricts the members from disclosing the services provided them. In the given case, Mr. Shushil Maharjan. a chartered accountant, published the book and mentioned his professional experience and his association as a partner with M/s Daniel Brisk, a Swedish firm of chartered accountants. Mr. Shushil Maharjan being a chartered accountant in practice has committed the professional misconduct mentioning that at present he is a partner in M/s Daniel Brisk, a Swedish firm of chartered accountants.
b) The Code of Ethics issued the Institute of Chartered Accountants of Nepal on “Soliciting Business, Accepting New Engagement, Fees and Commission” prescribes the provisions for providing service free of cost. Subject to non-compromise in the quality of professional services being offered, it allows the members to provide services without charging any fee to the welfare or spiritual institutions established with an objective of providing social services. Further, the council of The Institute of Chartered Accountants of Nepal has waved (vide decision dated 2071/11/4- 194th Meeting) requirement of minimum fee for the religious organizations which have annual transactions of less than 20 lacs.
Accordingly, in the given case, if the transactions of the institution does not exceed 20 lacs, it will not be termed as guilty of professional misconduct as the service was provided to a religious institution established for purely promoting social values. However, if the transactions of the institution exceeds 20 lacs, the auditor shall be guilty of violating code of conduct.