Page 163 - Quick Insights Book 2022

Ann. 14 – Revised Guidelines of Network

5.3 Provisions of Regulation 190 of the Chartered 8. Ethical Compliance
Accountants Regulations, 1988 shall be applicable to
the name of an Alliance. However, even if a name is 8.1 Once an Alliance as referred to in para 4.1 is registered
approved and subsequently it is found that the same is with the ICAI, it will be necessary for such an Alliance
undesirable, the said name may be withdrawn at any and its constituent entities to comply with the Code
time by the ICAI. of Ethics prescribed by ICAI and relevant Council
Guidelines.
5.4 The ICAI shall approve or reject the name of an Alliance
and intimate the same to the Alliance at its address 8.2 If one firm of the Alliance is the statutory auditor of an
mentioned in the prescribed Form “A” within a period entity then the associate [including the Alliance firm(s)]
which shall not be later than 30 days from the date of or the said firm directly/ indirectly shall not accept the
receipt of the said Form. internal audit or book-keeping or such other professional
assignments which are prohibited for the statutory
auditor firm. If one firm does audit work, another firm in
6. Registration of an Alliance
the Alliance cannot perform non-audit services of same
6.1 After the name of an Alliance is approved as per the client.
provisions under para 5 of the Guidelines, the ICAI shall
reserve such name for a period of three (3) months from 8.3 In those cases where rotation of firms is prescribed by
the date of approval. any regulatory authority, no member firm of an Alliance
can accept appointment as an auditor in place of any
6.2 An Alliance shall come into existence only if it is member firm of the Alliance which is retiring.
registered with the ICAI and for which an application
in the prescribed Form “B‟ shall be duly filed. Every 8.4 An Alliance may advertise the Alliance to the extent
agreement, bye-law, MOUs, by whatever name called, permitted by the Advertisement Guidelines issued by the
must be filed with ICAI, without which registration will not ICAI. The firms constituting the Alliance are permitted to
be given. The ICAI shall register or reject the application use the words “A Member Firm of A B” or “A Member
within 30 days of filing the application or submission of Firm of A B & Alliance” on their professional stationery.
information as desired by the ICAI. The Council will make appropriate changes to this effect
in Code of Ethics.
6.3 In order to use the name of an Alliance within the
meaning of the Alliance Guidelines, its registration with 9. Consent of Clients
the ICAI is mandatory. An Alliance Registration Number
(ARN) and a certificate of registration to this effect will The effect of registration of an Alliance with the ICAI will
be issued by the ICAI. be deemed to be a public notice of the Alliance and,
therefore, consent of client will be deemed to have been
6.4 Unregistered Alliances, if any, are not permitted to derive obtained.
undue advantage over registered Alliances. However, all
restrictions imposed by Alliance Guidelines on registered 10. Framework of internal byelaws of an Alliance
Alliances will be applicable to them. Hence, they are
advised not to operate unless registered with ICAI. An Alliance arrangement, as referred to in para 3 above
may include the following (illustrative only):
7. Change in constitution of a registered Alliance (i) Administration of the Alliance

7.1 In case of change in the constitution of a registered (ii) Dispute settlement procedures through arbitration
Alliance on account of any entry into or exit from or and conciliation and assumption of liabilities
a discontinuation of the Alliance, the Alliance shall
communicate the same to the ICAI by filing a prescribed (iii) Resource sharing arrangements
Form “C‟ within a period of thirty (30) days from the date Appendix-1
of such change and a revised certificate of registration (Referred to in para 4 of the Guidelines for Alliance and
will be issued by the ICAI in this regard. In case, an forms an integrated part of the Guidelines)
intimation is received at ICAI beyond 30 days, then the
change in constitution or discontinuation, as the case Concept
may be, will be reckoned from the date of receipt of
intimation at ICAI. 1.1 To enhance their ability to provide professional services,
firms frequently form larger structures of a group
7.2 The Alliance will cease to exist, in case only one entity of entities with other entities. Whether these larger
remains in Alliance on account of change in constitution structures create an Alliance, depends on the particular
of Alliance.
facts and circumstances. The firms enjoy more freedom
to operate in comparison to constituents of Network.

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