CA Rudra, a Chartered Accountant in practice, was approached by Jin Ltd. to assist the company in improving its internal operations. The company…

CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · November 2026
CA Rudra, a Chartered Accountant in practice, was approached by Jin Ltd. to assist the company in improving its internal operations. The company requested him to review its existing organisational structure, prepare job descriptions for various positions, evaluate the workload of employees and design an appropriate employee incentive scheme. CA Rudra agreed to provide these services for a professional fee. He was not appointed as the statutory auditor or internal auditor of Jin Ltd. Examine whether acceptance of such assignment by CA Rudra amounts to professional misconduct.

Suggested Answer and Working Notes:

Pursuant to Section 2(2)(iv) above, the Council has passed a resolution permitting a Chartered Accountant in practice to render entire range of “Management Consultancy and other Services”. The expression “Management Consultancy and Other Services” includes Organization structure and behaviour, development of human resources including design and conduct of training programmes, work study, job-description, job evaluation and evaluation of workloads and setting up executive incentive plans, wage incentive plans etc. Since the services proposed to be rendered by CA Rudra fall within the permissible scope of Management Consultancy and Other Services, he is permitted to undertake the assignment. Therefore, CA Rudra is not guilty of professional misconduct for accepting and rendering these services.

Topics: Professional Ethics & Liabilities of Auditors

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