CA Pooja agrees to audit a company for a fee equal to 2% of its net profit for the year. This is professional misconduct under the Chartered Accountants Act, 1949 because:

Correct answer: B) It amounts to charging fees based on a percentage of profits, which Clause (10) of Part I of the First Schedule prohibits except as permitted by the Council's regulations

Explanation

Clause (10) of Part I of the First Schedule treats it as misconduct if a member in practice charges or offers to charge fees based on a percentage of profits or contingent upon findings or results, except as permitted under regulations (for example, certain receivership or liquidation roles). Fees linked to profits create a self-interest threat to independence.