You, a Chartered Accountant, have been approached by two partners of a firm who are in the process of dissolving their partnership. Both partners…

CA Final · Financial Reporting · PYQS · January 2026
You, a Chartered Accountant, have been approached by two partners of a firm who are in the process of dissolving their partnership. Both partners wish to engage you to assist with the financial aspects of the dissolution. Which statement out of the following statements best describes the ethical concern in this situation under the Code of Ethics of the Institute of Chartered Accountants of India?
(A) (A) There is no ethical issue as long as both partners pay equal fees for the service.
(B) (B) You must refuse the engagement from both the parties, as assisting both parties is strictly prohibited under all circumstances.
(C) (C) This situation creates a potential conflict of interest, and you may proceed only if informed consent is obtained from both parties and appropriate safeguards are applied.
(D) (D) You can act for both parties freely, as they are no longer in a business relationship.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

(C) This situation creates a potential conflict of interest, and you may proceed only if informed consent is obtained from both parties and appropriate safeguards are applied.

Topics: Ind AS 110

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