New Delhi: The Institute of Chartered Accountants of India (ICAI) has proposed a major overhaul of its Code of Ethics, easing several restrictions on auditors and their firms from advertising or developing websites - a move aimed at helping them showcase their services.
The institute has also suggested fresh guidelines on audit independence that, experts said, would discourage accountants from offering non-audit services to listed companies where they are statutory auditors. The move seeks to minimise conflict of interest and strengthen audit quality.
The exposure draft on the Code of Ethics, released by ICAI's Ethical Standards Board, has proposed new norms on a range of issues including sustainability assurance and audit fees, in line with the broader goal of fostering large home-grown accounting and consultancy firms in India.
ET had on October 24 reported that ICAI was reviewing its Code of Ethics, including norms on advertising and websites for accounting and network firms. ICAI president Charanjot Singh Nanda told ET last week that the institute would also propose amendments to the Chartered Accountants Act to further liberalise advertising rules for members.
Experts said the new ethics code could come into effect once the CA Act is amended. At present, chartered accountants and their firms can advertise only through limited "write-ups", with restrictions on font size, use of photographs and other details.
The draft proposes to remove limits on font size and the requirement to mention membership numbers in advertisements. Members will also have flexibility to include details of their firms, services and assignments. Domestic network firms will be allowed to showcase their events on websites, which is currently not permitted.
"These changes will help form multi-disciplinary partnerships offering regulated and unregulated services such as auditing, secretarial and legal under one firm," said Prateek Agarwal, partner, Nangia & Co LLP.
Some of the proposed revisions, particularly around sustainability assurance, align with the International Code of Ethics already in place, Agarwal added. ICAI has sought stakeholder feedback on the draft by November 26.
ICAI's push to discourage offering both audit and non-audit services to the same client comes as the National Financial Reporting Authority has raised concerns, through inspection reports, over potential conflicts of interest. Affiliates of large firms such as Deloitte and PwC have stopped taking non-audit assignments from audit clients.
The institute has also suggested fresh guidelines on audit independence that, experts said, would discourage accountants from offering non-audit services to listed companies where they are statutory auditors. The move seeks to minimise conflict of interest and strengthen audit quality.
The exposure draft on the Code of Ethics, released by ICAI's Ethical Standards Board, has proposed new norms on a range of issues including sustainability assurance and audit fees, in line with the broader goal of fostering large home-grown accounting and consultancy firms in India.
ET had on October 24 reported that ICAI was reviewing its Code of Ethics, including norms on advertising and websites for accounting and network firms. ICAI president Charanjot Singh Nanda told ET last week that the institute would also propose amendments to the Chartered Accountants Act to further liberalise advertising rules for members.
Experts said the new ethics code could come into effect once the CA Act is amended. At present, chartered accountants and their firms can advertise only through limited "write-ups", with restrictions on font size, use of photographs and other details.
The draft proposes to remove limits on font size and the requirement to mention membership numbers in advertisements. Members will also have flexibility to include details of their firms, services and assignments. Domestic network firms will be allowed to showcase their events on websites, which is currently not permitted.
"These changes will help form multi-disciplinary partnerships offering regulated and unregulated services such as auditing, secretarial and legal under one firm," said Prateek Agarwal, partner, Nangia & Co LLP.
Some of the proposed revisions, particularly around sustainability assurance, align with the International Code of Ethics already in place, Agarwal added. ICAI has sought stakeholder feedback on the draft by November 26.
ICAI's push to discourage offering both audit and non-audit services to the same client comes as the National Financial Reporting Authority has raised concerns, through inspection reports, over potential conflicts of interest. Affiliates of large firms such as Deloitte and PwC have stopped taking non-audit assignments from audit clients.
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