Page 184 - Quick Insights Book 2022

Ann. 15 – ICAI Rules of Merger & Demerger of CA Firms

We hereby declare that:
(a) the network constituents have entered into an agreement to form this network.

(b) that the partner(s) signing this declaration has been duly authorized by the other partners of the firm
Place : ……………………….. Name(s) with Membership No(s).
and signature(s) of duly authorized

Date Partner(s)/Proprietor(s) of the firms/
Member constituting Network

NOTIFICATION NO.1-CA(7)/60/2002, 8TH MARCH, 2002
1-CA(7)/60/2002: In exercise of the powers conferred by clause (ii) of Part II of the Second Schedule to the Chartered Accountants
Act, 1949, the Council of the Institute of Chartered Accountants of India hereby specifies that a member of the Institute in practice
shall be deemed to be guilty of professional misconduct, if he accepts the appointment as statutory auditor of Public Sector
Undertaking(s)/Government Company(ies)/Listed Company(ies) and other Public Company(ies) having turnover of Rs. 50 crores or
more in a year and accepts any other work(s) or assignment(s) or service(s) in regard to the same Undertaking(s)/Company(ies)
on a remuneration which in total exceeds the fee payable for carrying out the statutory audit of the same Undertaking/company.
Provided that in case appointing authority(ies)/regulatory body(ies) specify(ies) more stringent condition(s)/restriction(s), the same
shall apply instead of the conditions/restrictions specified in this Notification.
Explanation:
1. The above restrictions shall apply in respect of fees for other work(s) or service(s) or assignment(s) payable to the statutory
auditors and their associate concern(s) put together;
2. For the above purpose,

(i) the term “other work(s)” or “service(s)” or “assignment(s)” shall include Management Consultancy and all other
professional services permitted by the Council pursuant to Section 2(2)(iv) of the Chartered Accountants Act, 1949
but shall not include: -
(i) audit under any other statute;
(ii) certification work required to be done by the statutory auditors; and

(iii) any representation before an authority;
(ii) the term “associate concern” means any corporate body or partnership firm which renders the Management
Consultancy and all other professional services permitted by the Council wherein the proprietor and/or partner(s)
of the statutory auditor firm and/or their “relative(s)” is/are Director/s or partner/s and/or jointly or severally hold
“substantial interest” in the said corporate body or partnership;
(iii) the terms “relative” and “substantial interest” shall have the same meaning as are assigned under Appendix (10)
[now Appendix (9)] to the Chartered Accountants Regulations, 1988.
3. In regard to taking up other work(s) or service(s) or assignment(s) of the undertaking/company referred to above, it shall
be open to such associate concern or corporate body to render such work(s) or service(s) or assignment(s) so long as
aggregate remuneration for such other work(s) or service(s) or assignment(s) payable to the statutory auditor/s together
with fees payable to its associate concern(s) or corporate body(ies) do/does not exceed the aggregate of fee payable for
carrying out the statutory audit.
4. This notification is applicable for any appointment(s) on or after 1st April, 2002.

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