In this article, Prathiksha Ravi, a law graduate from Institute of Law, Nirma University discusses how to complain against professional misconduct by Chartered Accountants in India.


Chartered Accountants play a pivotal role in our society. We rely on them for sound financial accounting, management, and advice on a variety of business and taxation matters. Every accountant is duty bound to follow basic fundamental principles such as[1]:

  • Integrity
  • Objectivity
  • Professional Competence and Due Care
  • Confidentiality
  • Professional behaviour and
  • Technical Standards

Chartered Accountants in India are governed under the Chartered Accountants Act, 1949. Enacted with the view of providing regulations for the profession of Chartered Accountants and the Institute of Chartered Accountants of India (ICAI) established under the Act is in charge of regulating the profession of Accountancy in India[2].

What is Professional Misconduct?

As per the Chartered Accountants Act[3], Professional Misconduct is defined to include any acts/omission of acts described under the First and Second Schedule of the Act.

A Chartered Accountant will be guilty of professional misconduct if they commit the following acts



Allow names – If someone else practices in his name unless they are also a chartered accountant in practice and is in a partnership or employed by him

  • Share / Accepts Profits – Pays or agrees to pay/accepts or agrees to accept any share, commission or brokerage or profits of his professional business to any person other than a person in his Partnership, a person employed by him or a member of the Institute.
  • Partnership with an unqualified person – Enters into a partnership with a person other than a person qualified to be a member of the Institute
  • Secures work through another person – Secures any professional business through any person who is not employed by the Accountant or by means which are not open to the Accountant
  • Solicits work by advertising – Tries to get clients or professional work through circular, advertisement, interview or personal communication.
  • Advertises his attainments – Advertises his professional attainments or services or using a designation other than that of a Chartered Accountant.
  • Becoming an auditor without prior written communication – He accepts to become an ‘auditor’ which was previously held by another chartered accountant without a written communication to him.
  • Accepts the role of an auditor without complying with Company Law provisions – Accepts the appointment as an auditor of a company without duly complying with Section 225 of the Companies Act, 1956[4]
  • Engages in other business – Engages in a business or occupation other than that of a Chartered Accountant
  • Accepts Commission – Accepts commission from any lawyer, broker or another chartered accountant
  • Sharing of fees – Shares his fees/salary of his employment with another person
  • No registration done – Not being an accountant registered with the Institute but acting as one
  • Non-compliance – Does not supply information or does not comply with the requirements called for by the Institute, council or any of its committees
  • False Information – Providing false information while inviting professional work or accepting tenders and enquiries.
  • Guilty of an offence – Held guilty by any court for an offence punishable by the term of imprisonment not exceeding six months.
  • Disrepute – Brings disrepute to the profession and the Institutes by his actions.
  • Breach of confidentiality – Disclosing information provided by the client to a person other than a client without his/her consent.
  • Submits report not made by him – Submits a report of financial statement not made by him as made by him/his firm.
  • Using his name with estimate of earnings – Permits his name/ name of his firm to be used in connection with an estimate of earnings based on contingency
  • Expression of opinion based on substantial interest – Expresses his opinions on a financial statement of a business/firm in which he has a substantial interest in
  • Failure to disclose – Fails to disclose a necessary fact known to him in a financial statement without which the financial statement would be misleading
  • Failure to report misstatement – Fails to report a material misstatement in a financial statement known to him which is under his professional capacity
  • Negligence / No due diligence – Does not exercise due diligence or is grossly negligent
  • Failure to obtain information required – Fails to obtain sufficient information needed for his expression of his opinion
  • Failure to report departure from procedure – Fails to report any material departure from general procedure of audit in the current circumstance
  • Misappropriation of moneys – Fails to keep moneys of his client other than fees and not using it a manner required to be done in a reasonable time.
  • Against rules and guidelines under the Act/Council – Does not follow/goes against any provisions of the Chartered Accountants Act and its regulations or guidelines issued by the Council
  • Sharing of confidential information – Discloses confidential information of his employment other than when required by law
  • Including False Information – Including false information in any statement or document to be submitted to the Institute, Council or any of its Committees.
  • Embezzles money – Embezzled money received in his professional capacity


The Council of the Institute of Chartered Accountants of India, as per the Act has the right to establish a Disciplinary Directorate headed by the officer of the Institute (Director, Discipline) to investigate on any complaint received to it on professional misconduct.


What happens in the case of breach of confidentiality by a Chartered Accountant?

Breach of Confidentiality is the act of revealing information by the accountant which is considered to be “confidential” for the client unless when required by law. For example – If a client discloses information about the working of his firm/company, and the accountant has disclosed the said information to another, it is considered to be a breach of confidentiality. Breach of Confidentiality is an act of Professional Misconduct which is included in the Second Schedule of the Chartered Accountants Act.

How to report instances of Professional Misconduct committed by a Chartered Accountant?


  • A complaint can be filed in three copies in English to the Director (Discipline), The Institute of Chartered Accountants of India, along with the prescribed fee (Rs.2500/-).
  • The Director shall give a prima facie opinion on the alleged misconduct
  • If the Director is of the opinion that the accountant is guilty of an act that falls under the First Schedule – then the complaint is forwarded to Board of Discipline
  • The Board of Discipline will follow a summary disposal procedure. If the member is found guilty of misconduct, the member will be given an opportunity to be heard and the following steps can be taken:
  • Reprimand the member
  • Remove his name from the Register for a period of up to 3 months
  • Impose any fine it may think as fit that extends up to one lakh
  • If the Director is of the opinion that the accountant is guilty of an act that falls under the Second Schedule or both Schedules – the complaint is forwarded to the Disciplinary Committee.
  • If the member is found guilty of misconduct, the member will be given an opportunity to be heard and the following steps can be taken:
  • Reprimand the member
  • Remove his name from the Register for a period it may deem fit
  • Impose any fine it may think as fit that extends up to five lakhs
  • Any member of the Institute aggrieved by the decision taken by the Board of Discipline/Disciplinary Committee may within 90 days appeal to the Appellate Authority located in Delhi under the Chartered Accountants Act, 1949 (2011 Amendment).
  • The Appellate Authority can take the following steps
    • Confirm / modify / set aside the order
    • Impose / set aside / reduce / enhance the penalty imposed
    • Return the case back to the Board of Discipline or Disciplinary Committee for further enquiry
    • Pass any order it may deem fit

In the case of withdrawal of the complaint, the Director may place it before the Board of Discipline or the Disciplinary Committee as per the case. The Committee / Board can permit or deny the withdrawal of the case at any stage based on the circumstances.

Can a Chartered Accountant hold the property of clients under lien in the cases of non-payment of fees?

In a recent decision by the Ethical Standards Board of the Institute of Chartered Accountants of India (ICAI)[5], it was held that the Chartered Accountant cannot hold money/formal records as a lien in the case of non-payment of fees.  

The term ‘right to lien’ as under the Indian Contract Act is a right to have possession over a property belonging to someone else due to pending payment/outstanding debt. In the case of RD Saxena v. Balram Prasad[6] held that holding of documents/formal records of a client as ‘lien’ to get his fees is considered as unethical.


Professional misconduct refers to the act/omission on the part of the Chartered Accountant which is contrary to the law given under the Chartered Accountants Act, 1949.

The following steps must be kept in mind while filing a complaint against a Chartered Accountant:

  1. Go through the First and Second Schedule of the Chartered Accountants Act, 1949 and find out within which clause the act/omission falls in.
  2. File a complaint with the Director (Discipline) using the prescribed form along with the given fees.
  3. The complaint must be filed in triplicate i.e. in three forms and must be in English. If you’re filing a form in Hindi / other Regional Language then a translation in English must be attached.
  4. The Director (Discipline) will judge whether there is a prima facie case and forward the complaint to respective Board / Committee.
  5. If you’re aggrieved with the order, you can file an appeal within 90 days to the Appellate Authority located in Delhi constituted under the Chartered Accountants Act, 1949 (2011 Amendment).
  6. In the case where you want to withdraw your complaint, The Director (Discipline) will place the case before the Board / Committee and they will decide to permit/deny the withdrawal of the complaint


[1] Code of Ethics for Chartered Accountants [Date of Visit: 01/02/2017 Time of Visit: 4:36 pm IST]

[2]Section 3, Chartered Accountants Act, 1949

[3] Section 22, Chartered Accountants Act, 1949 amended by Chartered Accountants (Amendment) Act, 2006

[4] Corresponding Sections – 139,140 and 142 read with Section 141 of the Companies Act, 2013

[5] Ethical Standards Board, ICAI [Date of visit: 16/02/2018 Time of Visit: 2:20 pm IST]

[6] AIR 2000 SC 3049


  1. One famous CA in AP State,working as CA cum Political Anlyst and giving daily interviews to one YouTube channel and also fully supporting one political party and one politician with many cases in courts.I am sincerely requesting the concern body to take necessary actions.Indian economy is still in struggle without proper growth because of these type of PROFESSIONAL qualified persons.

  2. I am also facing same issue. My CA also doing the same. He filed my audit report having many mistakes. Now IT Department raised the demand. I request to my new CA to go through the previous audit report now he is saying that your old CA had done the mistake while filing the audit report. But my old CA is not accepting the same. What can do it for such case.

  3. If the the CA is guilty for the professional misconduct, but there is no consideration of remuneration then what further steps will be taken by the Disciplinary Committee.

  4. My CA did not do ROC filing for last 3 years and kept me in dark. When I got notice from MCA about the company name is in process of being Struck off, he informed me that we did not do the filing for 3 consecutive years.

    Now, he is saying that we need to go to NCLT to reinstate the company, is this not an act in Negligence on his part? For 3 years he did not tell me about this.

  5. I sold my flat in Nov 2017, my CA took the TDS from the buyer and deposited it into his account. He filed my returns for year 2017/18 and asked for a refund of the TDS amount. The income tax department has refused to refund it as it does does show up as paid in my folio. For the last 1.5 years the CA is making me make rounds , he has stopped picking up my phone calls. The amount is 20% of the sales feed and is a big amount. Please assist.

  6. Hi,I am Mukund from Goprogif Merchandise Pvt.Ltd. .My chartered accountant did not submitted my annual return and other documents on time.Now he is saying me to deposit 43,700 rs to MCA for late filling.But I have not done any mistake in it.whatever and when he asked me to scan and sign and submit the documents,that I did.For this also on mail he sent me documents on 6 Jan,2019 and I returned back mail to him on 15 Jan,2019 but he did not uploaded it to MCA.

    Please suggest me what to do. I am very much tensed.

  7. I have a retail firm , My CA does not fill any GST return since june 2018, now he is saying you have to pay a penalty of INR 35000.00 and he did not provide me any copy of filling GST Return or challan. All time he told me that we have to fill the challan of 10000 , 2000 and many more, even he didnot give me back my billing file too.

  8. My CA said we do not need to fill ROC for 2017-18. And now when i see my company supposed to fill Form 22 which needs ROC too. Now he says we should fill ROC. And he is charging me double penalty. What best i can do. Total penalty amount he gave me 40,ooo + 10,000 + his service cost

  9. there are two partners in a llp firm. can the ca who is hired by both partners consult only with one partner to appoint new partners or any other official communication?

  10. What if he is not a CA, but he has a tie up with two CA professionals, and possess their digital signatures and rubber stamps and uses it himself without sending the financials or any other documents to them. Even more those professionals gave him the right to use their signature also. So, he himself signs in the financials and other important documents, even though he is not a CA or CMA professional. They don’t even know for what all the companies their membership is used for. How to file a complaint against those so called professionals and that person?

  11. If the the CA is guilty for the professional misconduct, but there is no consideration of remuneration then what further steps will be taken by the Disciplinary Committee.

    • A chartered accountant in practice shall be deemed to be guilty of professional misconduct, if he secures, either through the services of a person who is not an employee of such chartered accountant or who is not his partner or by means which are not open to a chartered accountant, any professional business


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