Important Notification to CAs: Do Not Sign Non-Tax Cases or Issue UDIN for Provisional Financials – Complete Guide

In recent months, several professional bodies and regulatory authorities have cautioned Chartered Accountants (CAs) across India regarding the misuse of CA signatures, unauthorised certification, and wrongful generation of UDINs. Many CAs continue to receive inappropriate requests from clients for signing provisional statements, projected balance sheets, non-statutory formats, loan papers, and various non-tax-related documents.

To protect the integrity of the profession, regulatory bodies have reinforced strict guidelines on:

Non-tax cases where CA signature/certification is NOT permitted
Situations where UDIN must NOT be generated
Professional liability for signing provisional or unaudited financials
Penal consequences for CAs issuing certificates beyond their scope

This article summarises the updated guidelines every CA must follow in 2025.

1. What Triggered This Notification?

Banks, NBFCs, private companies, loan agents, and even individuals were increasingly approaching CAs to sign:

Provisional financial statements
Projected financials for loan purposes
Unverified net worth certificates
Estimated balance sheets
Non-tax declarations
Third-party confirmations
Income proof for non-business taxpayers

Many such documents are outside the scope of ICAI Standards on Auditing, and issuing a UDIN for these may constitute professional misconduct.

2. CAs Must NOT Sign the Following Documents

Below are the common documents strictly prohibited for CA certification except where specifically permitted by law:

A. Provisional / Estimated Financials

Provisional balance sheet
Provisional profit & loss account
Estimated financial statements for loans
Draft or unaudited financial statements without disclaimers

Why prohibited?
They do not represent true and fair financials and may mislead stakeholders.

B. Income Proof or Income Certificates (Non-Tax)

CAs cannot certify:

Income certificates for salaried/non-business individuals
Income proof for visa, education loans, subsidized schemes
Certificates declaring someone’s “earning capacity”

Only Form 16, ITR, GST returns, or audited statements can act as income proof.

C. Net Worth Certificates Without Evidence

CAs cannot sign “approximate” net worth statements or certificates based on client assumptions.
Net worth certification is allowed ONLY when:

Full books of accounts are examined
Physical verification of assets (if required) is performed
Adequate documentation is available

D. Non-Tax or General Purpose Declarations

CAs must avoid signing:

Affidavits
Personal declarations
Character certificates
Statements of facts not personally verified
Certificates supporting government scheme eligibility

These are not within the scope of the Chartered Accountants Act.

3. When NOT to Issue a UDIN

UDIN must not be generated in the following cases:

🚫 Provisional financial statements

🚫 Projected balance sheets or forecasts

🚫 Unsigned or draft statements

🚫 Self-prepared documents by clients

🚫 Certificates where no audit/verification is done

🚫 Declarations not covered by ICAI-prescribed formats

UDIN is mandatory only when the CA signs a report/statutory certificate based on verification, such as:

Audit reports
Tax audit reports
Statutory certifications under Companies Act, Income Tax, GST etc.
Net worth certificates based on verified books

4. ICAI Ethical Standards – What a CA Can Sign

CAs may sign:

✔ Audited financial statements
✔ Tax audit reports (Form 3CA/3CB/3CD)
✔ GST audit/certification (where applicable)
✔ Certificates under statutory requirements (Income Tax, MCA, FEMA, Banking norms)
✔ Verified net worth statements based on books and supporting documents
✔ Projected financials only when prepared solely by the management and clearly marked as “Management Certified – CA Not Responsible“

5. Mandatory Disclaimers for Permitted Certifications

Where certification is allowed, the following disclaimers MUST be included:

“Information has been provided by the management.”
“No audit or review was conducted.”
“This certificate should not be treated as a statutory certification.”
“The CA is not responsible for future performance, projections or estimates.”

This protects the CA from future liability.

6. Consequences for Misuse of Signature or Wrongful UDIN

Violating ICAI guidelines may lead to:

Professional misconduct proceedings
Disciplinary action under the Chartered Accountants Act, 1949
Financial liability if mis-certification leads to stakeholder loss
Blacklisting by banks or regulatory bodies
UDIN portal misuse flagging

ICAI has become increasingly strict in monitoring UDIN misuse.

7. What CAs Should Do When Clients Demand Such Certifications

Use a professional response such as:

“ICAI guidelines do not permit issuance of CA certification or UDIN for provisional/estimated/non-tax documents. Kindly refer to ICAI’s advisory on this matter.”

Offer alternatives:

Provide audited or management-certified documents
Issue a disclaimer-based non-verification note where legally allowed
Provide ITR/GST returns instead of income certificates

8. Best Practice for CAs Going Forward

Follow SA 200, SA 210, SA 700, SA 705, SA 706 standards
Never sign blank or pre-filled forms
Maintain a strong documentation file
Avoid conflicts of interest in loan-related certifications
Use UDIN only when work is fully completed

Conclusion

The updated notifications protect both the profession and individual CAs from legal and disciplinary consequences. Every Chartered Accountant must strictly comply with ICAI guidelines regarding:

Non-tax document signatures
UDIN generation restrictions
Provisional or estimated financial statements

Maintaining professional integrity is crucial in today’s environment of increasing regulatory scrutiny.