ICAI’s Revised Code of Ethics 2019 Applicable w.e.f. 1 April, 2020

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ICAI’s Revised Code of Ethics 2019* Applicable w.e.f. 1 April, 2020

Fundamental ethical principles requires that a CA firm should not accept an audit assignmentin in the following circumstances because a self-interest threat might be created:
1. Where the total gross annual professional fees from the audit client and its related entities exceed 15% of the total fees of the CA firm for two consecutive years. Few exceptions have been provided to this rule.
2. Ceiling on non-audit fees: Aggregate remuneration for non-audit work should not exceed the aggregate of fee payable for carrying out the statutory audit. [Not. No.1-CA(7)/60/2002 dated 8-Mar-2002]
3. Quoting a fee lower than another
accountant is not in itself unethical. However, the level of fees
quoted should not be so low that it creates a threat to compliance with the
principle of professional competence.
4. The fees which are based on a percentage of profits or which
are contingent upon the findings, or results of such work, is not
allowed except in cases which are permitted under Regulation
192 of The Chartered Accountants Regulations, 1988, e.g. in the case of services related to cost optimisation, the
fees may be based on a percentage of the benefit
5.  If a significant part of fees is not paid before the audit report for the following year is. issued. It is generally expected that the firm will require payment of such fees before such audit report is issued. The
requirements and application material set out in Section 511 of Code of Ethics, with respect to loans and guarantees, might also apply to situations where such unpaid fees exist.
6. A firm, network firm or an audit team member shall not accept gifts and hospitality from an audit client, unless the value is trivial and inconsequential.

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