Nepal Chartered Accountants Act, 2053 and Government Audit Flashcards

A set of 100 flashcards covering the Nepal Chartered Accountants Act, 2053, ICAN governance, and Government audit procedures based on lecture transcripts.

Under which specific legislative act was the Institute of Chartered Accountants of Nepal formally established?

The Nepal Chartered Accountants Act, $2053$

In what year was the Institute of Chartered Accountants of Nepal (ICAN) formally established?

$$1997$$

How is the Institute of Chartered Accountants of Nepal (ICAN) legally characterized?

An autonomous, corporate body with legal rights similar to an individual

What is the total number of members in the Council of ICAN?

$$17$$

According to Section 7(3), how many Council members are elected by the Chartered Accountant members?

$$10$$

How many Council members are elected by the Registered Auditor members?

$$4$$

How many members of the Council are nominated by the Government of Nepal?

$$3$$

Who recommends the government-nominated members of the ICAN Council?

The Auditor General

What are the two types of membership provided by ICAN?

Chartered Accountants and Registered Auditors

What is the minimum age requirement for a person to be eligible for ICAN membership?

At least $21$ years of age

Besides being under age, what are three other grounds for disqualification of membership?

Insolvent, mentally unsound, or convicted of a moral turpitude offense

What are two common grounds for the removal of a member from the ICAN register?

Non-payment of fees or professional misconduct

What is required for a removed member to be reinstated?

Application with justification and payment of fees

What is the term of office for a member of the ICAN Council?

$$3\,years$$

What are the term lengths for the President and Vice-President of the ICAN Council?

$1\,year$, renewable once

From which group of Council members must the President and Vice-President be elected?

The $10$ Chartered Accountants (specifically Fellow Chartered Accountants)

What is the minimum number of years of experience required after obtaining membership to be eligible as a councilor?

$$10\,years$$

What is the citizenship requirement to be a councilor of ICAN?

Nepalese Citizen

By what date must the election of councilors be held every three years?

Within Jestha end

Which voting system is used for the election of ICAN councilors?

Single preferential voting system

Who acts as the chief of the Council?

The Chairperson (President)

What happens to the Certificate of Practice (COP) of a member upon being elected as Chairperson?

It is ipso facto suspended until the tenure ends

A Council member's seat is deemed vacant if they are absent from how many consecutive meetings without notice?

$$3$$

If a Council vacancy occurs with more than a year remaining in the term, how is it filled?

Through an election

If a Council vacancy occurs with less than a year remaining in the term, how is it filled?

The Council designates any member for the remaining term

Who is responsible for convening the meetings of the Council?

The Executive Director

How many times a year does the ICAN Council generally meet?

$$6\,times$$

What is the maximum allowable interval between two consecutive Council meetings?

$$3\,months$$

What percentage of members must request a meeting for the President to summon one?

$$25\,\%$$

Within how many days must a requested meeting be summoned by the President?

Within $15\,days$

What constitutes a quorum for an ICAN Council meeting?

Presence of $50\,\%$ members

In the event of a tie during a Council vote, who casts the deciding vote?

The person chairing the meeting

Who is responsible for authenticating the decisions of the Council?

The Executive Director

Does a vacancy or a disqualified nominee invalidate acts already done by the Council?

No, such acts and actions shall not be invalid by that reason only

List the four Standing Committees of the Council.

Disciplinary Committee, Examination Committee, Executive Committee, and Professional Guidance Committee

Who serves as the Chairman of the Disciplinary Committee?

A Fellow Chartered Accountant (FCA) designated by the Council from amongst its members

What is the total number of members in the Disciplinary Committee?

$$7$$

How many persons on the Disciplinary Committee are nominated by the Auditor General?

$$1$$

What is the tenure for members of the Disciplinary Committee?

$$1\,year$$

Which body has authority similar to a judicial court for investigating evidences and witnesses?

The Disciplinary Committee

What are the four types of punishment the Council can impose based on the Disciplinary Committee's recommendation?

Reprimanding, suspension up to $5\,years$, prohibition from practice, or cancellation of COP/membership

Where can a member file an appeal if they are dissatisfied with a Council decision on punishment?

The High Court

Who serves as the Chairman and Vice-Chairman of the Executive Committee?

The President and Vice-President respectively

Who serves as the Member Secretary of the Executive Committee?

The Executive Director

What is the tenure of office for members of the Executive Committee?

$$1\,year$$

A Council's Executive Committee can obtain approval to transfer what percentage of budget between heads?

$$25\,\%$$

Who serves as the Chairman of the Examination Committee?

The President

Which committee is responsible for preparing the Code of Ethics for the profession?

Professional Guidance Committee

What is the purpose of the Accounting Standards Board (ASB)?

To govern and regulate financial reporting and the accounting profession

Who nominates the Chairman of the Accounting Standards Board?

The Government of Nepal

How many Chartered Accountants are nominated to the Accounting Standards Board on the recommendation of the Council?

$$5$$

How many Registered Auditors are nominated to the Accounting Standards Board?

$$1$$

What is the tenure for nominated members of the Accounting Standards Board?

$$3\,years$$

What is the primary function of the Standards on Auditing Board (AuSB)?

To develop Standards on Auditing to govern and regulate the accounting and auditing profession

What is the composition of the Standards on Auditing Board in terms of ICAN members?

$1$ FCA (Chair), $3$ CAs, and $1$ RA

Where is the secretariat of both the ASB and AuSB stationed?

In the Head Office of the Institute (ICAN)

What is the maximum share a foreign citizen can hold in a partnership firm in Nepal?

$$51\,\%$$

What document is mandatory for a member to undertake audit business?

Certificate of Practice (COP)

What is the validity period for a Certificate of Practice?

Until the end of the financial year in which it was issued

Within how many days of the end of a fiscal year must a COP be renewed?

Within $60\,days$

What is the penalty fee if a COP is renewed after the first $60\,days$ but within the next $60\,days$?

$15\,\%$ additional fee

What is the penalty fee for renewing a COP in the final $60\,day$ extension period?

$25\,\%$ additional fee

What is a specific ground for the cancellation of a COP mentioned in the rules?

Engagement in non-accounting or non-auditing profession while holding a COP

What is a specific ground for the suspension of a COP?

Failure to complete required Continued Professional Education (CPE) hours

What is the maximum number of partners allowed in an auditing firm?

$$20$$

Can a member register more than one proprietorship firm at a time?

No, a member shall not register more than one proprietorship firm

Within how many years of cancellation can a firm be re-registered with the same name by the original partners?

$$5\,years$$

What is the audit limit for B Class Registered Auditors as of $2081/04/17$?

$$Rs. 1\,Arba\,52\,crores$$

What is the audit limit for C Class Registered Auditors?

$$Rs. 38\,Crores$$

What is the audit limit for D Class Registered Auditors?

$$Rs. 13\,Crores$$

What is the audit limit for Accounting Technicians?

$$Rs. 20\,Crores$$

When must ICAN publish the list of its members and COP holders?

Within $3\,months$ of expiry of each fiscal year

Is sharing audit fees with a non-member prohibited?

Yes, no member shall share profits/fees with any person other than a member of the Institute

What is the cooling-off period required before an auditor can audit an organization they previously served?

At least $3\,years$ after retirement

According to the Code of Ethics, are 'authorizing transactions' considered management responsibilities?

Yes

Is 'monitoring the dates for filing statutory returns' considered a management responsibility?

No, it is considered routine and administrative

What is the punishment for carrying out an audit without a COP?

Penalty of maximum $Rs.\,2,000$ or imprisonment for maximum $3\,months$, or both

What is the first conviction penalty for misusing the name or seal of the Institute?

Maximum penalty of $Rs.\,1,000$

What is the penalty for a complainant who lodges a complaint without reasonable cause and with intent to harass?

Fine up to $Rs.\,1,000$

Who oversees the expenses charged to the ICAN fund?

The Executive Director, under Council control

What is the tenure of the Executive Director of ICAN?

$$4\,years$$

According to Section 43, who is protected from personal liability for acts done in good faith?

Council members, Committee members, the Executive Director, and employees

Which organization is the liaison for ICAN when contacting the Government of Nepal?

Ministry of Finance

Which 1974 Act was repealed by the Nepal Chartered Accountants Act, 2053?

The Auditors' Act, 1974

Under which article of the Constitution of Nepal is the Auditor General appointed?

Article $240$

Who appoints the Auditor General of Nepal?

The President, on recommendation of the Constitutional Council

What is the tenure of the Auditor General?

$$6\,years$$

What is the minimum age to be appointed as the Auditor General?

$$45\,years$$

What is the mandatory retirement age for the Auditor General?

$$65\,years$$

What are the experience requirements for the Auditor General if not from the Special Class?

At least $20\,years$ of experience in audit related work

Which entities are subject to audit by the Auditor General according to the Audit Act, 2075?

Government offices, wholly government-owned corporate bodies, and local levels

Which primary legal framework regulates the auditing of public sector entities in Nepal?

The Audit Act, $2075$

Who audits the accounts of Rural Municipalities and Municipalities?

The Auditor General

Where must the audit report of a local level entity be discussed?

The Village Assembly or Municipal Assembly

What ownership threshold requires a corporate body to consult the AG for auditor appointment?

More than $50\,\%$ of shares or assets owned by the Government

Can the Auditor General appoint assistants for auditing wholly government-owned corporate bodies?

Yes, the AG may appoint licensed auditors as assistants

On what grounds can the President remove the Auditor General?

Physical or mental illness (on recommendation of the Constitutional Council)

Who issues directives to the Council regarding the development of the accounting profession?

The Auditor General

What is the maximum penalty for a subsequent conviction of misusing the ICAN seal?

$Rs.\,5,000$ or imprisonment for $6\,months$, or both

When was the Office of the Auditor General of Nepal established?

$2016/03/15\,B.S.$ ($29\,June,\,1959\,A.D.$)