DFL Ltd. has invited tenders for the appointment of statutory auditors, as M/s Cross Ltd., the previous auditor has retired due to completion of…
CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · November 2024
DFL Ltd. has invited tenders for the appointment of statutory auditors, as M/s Cross Ltd., the previous auditor has retired due to completion of terms of engagement. The tender is exclusively for Chartered Accountants. M/s SDS & Co. has submitted its tender quoting the fees for audit engagement considering the size and nature of business. The contract was awarded to M/s SDS & Co., and they were appointed as statutory auditors for 3 years from the financial year 2023-24. Whether M/s SDS & Co. will be held guilty of professional misconduct as per the Chartered Accountants Act, 1949.
Suggested Answer and Working Notes:
Correct Answer: Option (A)
(A) Yes, SDS & Co. will be held guilty of professional misconduct under clause (6) of Part-I of the First Schedule to the Chartered Accountants Act, 1949.
Topics: Professional Ethics & Liabilities of Auditors
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