Under the Chartered Accountants Act, 1949, "professional or other misconduct" is defined by reference to two Schedules. Complaints go to a Disciplinary Directorate at ICAI. Depending on which Schedule applies, a case is heard by the Board of Discipline or the Disciplinary Committee, and the outcome can be appealed. This post describes the framework in general terms. It is not legal advice and it does not discuss any individual or firm.
Last reviewed: 17 October 2026. Facts checked. We opened a transcription of Chapter V of the Act on a third-party site (Tilakmarg) and ran searches on the Disciplinary Directorate and the Schedules. The official-text copy on a government site failed to load (connection reset), so the section summaries below rest on that transcription and not on the gazette text. We did not open the First or Second Schedule item lists, so we do not list what falls in each. We leave out fee, fine and period figures because we could not confirm them from an official source. Check the Act and the current ICAI rules before relying on any procedural detail.
Why this matters
A CA's licence to practise rests on trust. The Act gives ICAI the power to inquire into misconduct and to act. Most members will never face a complaint. Knowing how the process works helps you run your practice so that you rarely need to.
The framework
1. The Act. Section 22 says "professional or other misconduct" includes any act or omission that is listed in the Schedules. The transcription we read adds that the Director can still inquire into conduct outside the listed situations. Treat the Schedules as the starting point.
2. The Schedules. There are two. The First Schedule and the Second Schedule list kinds of misconduct. Broadly, the transcription shows the First Schedule matters going to the Board of Discipline and the Second Schedule matters, or matters under both, going to the Disciplinary Committee. Read the Schedules themselves for the actual items.
3. The Disciplinary Directorate. The Council sets up a Disciplinary Directorate, headed by a Director (Discipline). The Director takes the first look at a complaint or information.
4. Two decision-making bodies.
| Body | Handles | Composition (as we read it) |
|---|---|---|
| Board of Discipline | First Schedule matters, in a summary manner | A presiding officer with legal and disciplinary experience, a Council member and a Central Government nominee |
| Disciplinary Committee | Second Schedule matters, and matters under both Schedules | The President or Vice-President of the Council presides, with two elected Council members and two Central Government nominees |
5. The Appellate Authority. A member penalised by the Board or the Committee can appeal to an Appellate Authority, which can confirm, modify or set aside the order.
How a case proceeds
In general terms, the stages are:
- Complaint or information. A complaint, with the prescribed fee, or other information reaches the Disciplinary Directorate.
- Preliminary view. The Director forms a prima facie view on whether misconduct is likely. We read that the Director must decide, within a set time, whether a complaint is actionable.
- Routing. If the alleged misconduct falls under the First Schedule, the matter goes to the Board of Discipline. If it falls under the Second Schedule, or both, it goes to the Disciplinary Committee.
- No prima facie case. The Board or Committee can agree with the Director and close the matter, or disagree and send it back for further investigation.
- Hearing. Before any penalty, the member must be heard. The bodies have powers like a civil court to summon people, examine them under oath and require documents.
- Decision. If the member is found guilty, the available actions include a reprimand, removal of the name from the Register for a period (and, for the Committee, permanently) or a fine.
- Appeal. The member can appeal. In the transcription, the time limit is stated in days from being told of the order, and a late appeal can be accepted for sufficient cause. Check the exact period in the Act.
One more point from the transcription: a person who was a member when the misconduct occurred stays within reach even if they have since left the Institute.
What the process does not include
- It is separate from criminal law and from any civil claim a client may bring.
- It is separate from action by other regulators, such as the body that reviews audit quality for certain entities. See our note on NFRA enforcement themes.
- It is not decided by a single person. The Director screens. The Board or the Committee decides.
Reducing the risk in everyday practice
Most disciplinary risk comes from ordinary lapses, not dramatic events. A sound practice has these habits.
- Written engagement letters. Scope, fees, responsibilities and limits in writing. Use the engagement letter template.
- Acceptance checks. Check independence, competence and the client's integrity before you accept. The engagement acceptance checklist is a place to start.
- Follow the standards. Apply the Standards on Auditing, and document the work. See what to keep in working papers.
- Respect the Code of Ethics. Independence, confidentiality, competence. Our post on the Code of Ethics clauses touching AI shows how it applies to new tools.
- Do not sign what you did not examine. Certificates, reports and attestations should reflect your own work.
- Keep your own records. If a complaint arrives, your file is your evidence.
- Respond on time. If ICAI writes to you, reply within the time given and with documents.
- Do not delegate judgment. Staff and tools can prepare, but the signing member is accountable.
If you receive a complaint
Without giving legal advice, a sensible order of steps is:
- Read the notice carefully and note every deadline.
- Collect the engagement letter, working papers, correspondence and the report in question.
- Consider taking advice from a lawyer or senior colleague who knows the process.
- Reply in writing, factually and fully, within the time allowed.
- Keep your tone professional. Do not contact the complainant to pressure them.
Frequently Asked Questions
What is professional misconduct for a chartered accountant?
It is an act or omission listed in the First or Second Schedule of the Chartered Accountants Act, 1949, or otherwise inquired into under the Act. The Schedules list the specific items.
Who investigates a complaint against a CA?
The Disciplinary Directorate, headed by the Director (Discipline), makes the first assessment. The matter then goes to the Board of Discipline or the Disciplinary Committee depending on the Schedule.
What is the difference between the Board of Discipline and the Disciplinary Committee?
In the text we read, the Board handles First Schedule matters in a summary manner. The Committee handles Second Schedule matters and matters under both Schedules.
Can a CA appeal against a decision?
Yes. A member penalised by the Board or the Committee can appeal to the Appellate Authority within the time the Act states.
Does professional misconduct action affect a member who has left ICAI?
The transcription we read says a person who was a member at the time of the alleged misconduct remains covered. Check the Act for the exact wording.
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