Chartered accountants do the most crucial job of handling the finances and accounts of their clients. At the MPVD & Associates CA firm in Kolkata, we go far beyond the paradigm of simple number crunching and bookkeeping for our clients and offer bigger solutions for diverse aspects of taxation, audits, company formation and legal matters, NRI taxation, and so much more.
At the behest of our conduct, it is crucial for us to constantly prove our credibility and trustworthiness to our clients as well as our professional foreground, securing our competitive edge. This is what defines our “ethical standards”.
The ICAI’s Ethical Standards and Code of Conduct for Indian Chartered Accountants
Ethical standards are a big part of defining what a chartered accountant can do, and the Council of the Institute of Chartered Accountants of India (ICAI) has been defining them under the Code of Ethics since 1963. Which is now referred to as the “Code of Conduct.”
The latest updated code was in 2020 when the ICAI set out new frameworks for ethical behaviour through its Code of Ethics. It defines the new principles and rules that modern CAs are required to adhere to in terms of financial reporting, the supply chain, and facilitating effective governance in organisations.
Failure to follow these guidelines may result in a fine or the permanent removal of the member’s name from the member’s register.
The Cornerstones of the Code of Ethics for Chartered Accountants
The main intent of the guidance and regulations governing the accounting profession the world over is similar. In India, the advent of the Companies Act, 2013 has made all individual CA practitioners as well as top CA firms exercise more care while discharging their duties, as the penalties and repercussions of non-compliance are severe. Below are the key components that make up a strong code of Ethics work:
- Integrity: CAs are expected to be honest and straightforward in all professional and business relationships. They must not knowingly be associated with information or activities that are misleading or fraudulent.
- Objectivity: Independence and objectivity are paramount. CAs must avoid conflicts of interest and maintain professional scepticism in their work. They should provide impartial advice and services to clients.
- Professional Competence and Due Care: CAs are required to maintain their professional knowledge and skills at the highest level. They must also diligently perform their professional duties with competence, diligence, and care.
- Confidentiality: CAs must not disclose information acquired during their work, except when required by law or professional standards. This ensures the trust of clients and stakeholders.
- Professional Behaviour: There is a wide set of laws and regulations defined under ICAI’s Code of Conduct that define the “professional behaviour” of CAs in detail. Maintaining confidentiality, producing proper documentation and agreement products, and maintaining transparency, especially in terms of payments and costs, are all parts of the professional approach.
- Compliance with Technical Standards: CAs must follow the technical standards and guidelines issued by the ICAI when using modern technologies for bookkeeping, auditing, data processing, and setting assurances.
The ICAI has been emphasising the need for a good policy framework for every CA firm in India. The industry is becoming more and more prone to borderless collaborations, with NRI transactions and taxation, foreign investing, and cross-border businesses on the rise.
To encompass the diversity of such businesses requires a strong, cohesive force to secure data, information, and processes.
Ethics Valued at MPVD & Associates
The Code of Conduct says that compliance is on an ever-increasing path, and once an organisation grows beyond a certain level, it may become quite difficult to both instil that culture and also get the employees to understand its seriousness and, in fact, the necessity of the practices outlined as “codes” of conduct.
While the ICAI would penalise or reprimand non-compliant CAs or members of a CA firm, the intent will only materialise when CA firms endorse more practical and constant disciplinary processes to demonstrate their reputation.
At MPVD & Associates, we tend to control the deviation with methods and communication protocols that give us a roundabout about any gaps in our system. We are people, not machines, and we tend to offer a valuable human approach when delivering the best legal and corporate solutions for our clients.