Last updated: December 17th, 2019 3:43 PM

Corporate Form of Practice - Chartered Accountants

A Chartered Accountant in practice is also entitled to practice in corporate form while adhering to certain rules and guidelines. In this article, we review the different types of service allowed in corporate form of practice by a practicing Chartered Accountant. 

Benefits of Corporate Form of Practice

The following are the benefits of adhering to guidelines regarding corporate form of practice:

• The member can hold full time Certificate of Practice besides being appointed the Managing Director/Whole-time Director/Manager of Management Consultancy Company.
• The member shall be entitled to train articled/audit assistant(s).
• There will be no restrictions on the quantum of the equity holding of the member, either individually and/or along with his relatives in the company.

Management Consultancy

With reference to corporate form of practice it shall not include the function of legal or periodical audit, taxation - direct taxes and indirect taxes, representation or advice relevant to tax matters or acting as liquidator, trustee, executor, administrator, arbitrator or receiver. However, corporate form of practice shall comprise the following:

1. Financial management planning in addition to financial policy determination
2. Capital structure planning in addition to advice regarding raising finance
3. Working capital management
4. Preparing project reports in addition to feasibility studies
5. Preparing cash budget, cash flow statements, profitability statements, statements of sources and application of funds
6. Budgeting inclusive of capital budgets and revenue budgets
7. Inventory management, material handling in addition to storage
8. Market research in addition to demand studies
9. Price-fixation and various other management decision making plans
10. Management accounting systems, cost control in addition to value analysis
11. Control methods, management information in addition to reporting
12. Personnel recruitment in addition to selection
13. Setting up executive incentive plans, wage incentive plans and so on
14. Management in addition to operational audits
15. Valuation of shares and business and advice with reference to amalgamation, merger and acquisition
16. Business Policy, corporate planning, organization development, growth in addition to diversification
17. Organization structure and behavior, development of human resources inclusive of design and conduct of training programs, work study, job-description, job evaluation in addition to evaluation of workloads

Ethical Compliance Requirement

Once a Management Consultancy Company is registered with the Institute according to the guidelines, it will be compulsory for such a company to comply with the following requirement:

If the individual practitioner or sole-proprietorship firm or partnership firm is the legal auditor of an entity then the Management Consultancy Company shall not accept the internal audit or book-keeping or any other professional assignments which are considered prohibited for the statutory auditor firm.

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