Core concepts
- 01Schedule I & II of CA Act — Professional Misconduct categories.
- 02Disciplinary mechanism: Director (Discipline) → Disciplinary Committee → Appellate Authority.
- 03Penalties: removal of name (1 mo to 5 yrs or permanent), fine.
- 04Independence in fact & appearance; relative & beneficial interest restrictions.
- 05NOC from previous auditor before accepting; communication via RPAD or evidence of delivery.
Flowchart summary
Misconduct (CA Act, Sec 22) | Schedule I -- relatively less serious (DC) Schedule II -- more serious (BoD / High Court) | Items: solicitation, fee-sharing, fund use, certification without competence | Penalty: Fine + Removal of name
Exam-critical pointers
- ⭐Public solicitation prohibited; only listing in directories permitted.
- ⭐Fee disclosure for assurance clients (>15% of total fees from one client raises threat).
- ⭐Communication with previous auditor: written; presumption of communication if RPAD acknowledgment received.
- ⭐Sec 144 Companies Act: list of non-audit services that statutory auditor cannot render.
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