Code of Ethics for Chartered Accountants
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Questions and Answers

What is the primary responsibility of a chartered accountant?

  • To satisfy the needs of an individual client
  • To maximize profits for the employing organization
  • To act in the public interest (correct)
  • To influence the behavior of business colleagues

    • Which of the following is considered an inducement?

  • Preferential treatment (correct)
  • Accuracy in financial reporting
  • Transparency in financial reporting
  • Compliance with laws and regulations

    • What does an inducement aim to do?

  • Properly influence behavior
  • Influence behavior without necessarily having improper intent (correct)
  • Act in accordance with ethical principles
  • Maximize profits for the organization

    • Which of the following is NOT considered an inducement?

    <p>Transparency in financial reporting</p> Signup and view all the answers

    What is considered professional misconduct under Clause 5 of the Chartered Accountants Act?

    <p>Failure to disclose a material fact known to the accountant, which is necessary for making a financial statement.</p> Signup and view all the answers

    What behavior would violate Clause 7 of the Chartered Accountants Act?

    <p>Exercising due diligence and avoiding gross negligence in professional duties.</p> Signup and view all the answers

    Under which clause would a Chartered Accountant be guilty of misconduct for failing to obtain sufficient information for expressing an opinion?

    <p>Failing to obtain sufficient information necessary for expressing an opinion.</p> Signup and view all the answers

    What kind of conduct is prohibited by the Chartered Accountants Act under 'D.FINANCIAL INTERESTS, COMPENSATION AND INCENTIVES LINKED TO FINANCIAL REPORTING AND DECISION MAKING'?

    <p>Manipulating information or using confidential information for personal gain.</p> Signup and view all the answers

    What was the consideration for the sale of land to Zest Ltd?

    <p>₹ 40 crores plus a premium of 6%</p> Signup and view all the answers

    How was the transaction of selling the land and repurchasing it treated in the Statement of Profit and Loss?

    <p>Treated as a sale including the profit arising on disposal</p> Signup and view all the answers

    Why should Infostar Ltd not have derecognized the land from the financial statements?

    <p>Because control is not transferred as Zest Ltd.’s ability to use and gain benefit from the land is limited</p> Signup and view all the answers

    According to Ind AS 115, under what conditions can a repurchase agreement be considered for qualifying as a sale?

    <p>When control is transferred to the buyer</p> Signup and view all the answers

    What should a Chartered Accountant do if they become aware of non-compliance or suspected non-compliance?

    <p>Seek to obtain an understanding of the matter and inform an immediate superior</p> Signup and view all the answers

    Under what circumstances would disclosure of a matter to an appropriate authority be precluded?

    <p>If it is contrary to law or regulation</p> Signup and view all the answers

    What action should a Chartered Accountant take if their immediate superior appears to be involved in a non-compliance matter?

    <p>Inform the next higher level of authority within the employing organization</p> Signup and view all the answers

    What is the purpose of making disclosure of a matter to an appropriate authority?

    <p>To enable an appropriate authority to cause the matter to be investigated and action to be taken in the public interest</p> Signup and view all the answers

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