DFL Ltd. has invited tenders for the appointment of statutory auditors, as M/s Cross Ltd., the
previous auditor has retired due to completion of terms of engagement. The tender is exclusively
for Chartered Accountants. M/s SDS & Co. has submitted its tender quoting the fees for audit
engagement considering the size and nature of business. The contract was awarded to M/s SDS &
Co., and they were appointed as statutory auditors for 3 years from the financial year 2023-24.
Whether M/s SDS & Co. will be held guilty of professional misconduct as per the Chartered
Accountants Act, 1949.


a)**  **Yes, SDS & Co. will be held guilty of professional misconduct under clause (6) of Part-I of the
First Schedule to the Chartered Accountants Act, 1949.


B) No, SDS & Co. will not be held guilty of professional misconduct under clause (6) of Part-I of
the First Schedule to the Chartered Accountants Act, 1949.


C) Yes, SDS & Co. will be held guilty of professional misconduct under clause (7) of Part-I of the
First Schedule to the Chartered Accountants Act, 1949.

D)No, SDS & Co. will not be held guilty of professional misconduct under clause (7) of Part-I of
the First Schedule to the Chartered Accountants Act, 1949.