Professional Misconduct and Professional Negligence

This article will help you to differentiate between professional misconduct and professional negligence.

Difference # Professional Misconduct:

The Cost and Works Accountants’ Act, 1959, under Section 22, defines the expression: ‘Professional Misconduct’ as follows:


‘Professional misconduct’ shall be deemed to include any act or omission specified in any of the schedules but nothing in this section shall be construed to limit or abridge in any way the power conferred or a duty cast on the Council under Section 21 to inquire into the conduct of any member of the Institute under any other circumstances.

Thus, it can be seen and stated that the Act does not specifically define the expression. It only specifies the circumstances when certain actions on the part of a cost accountant, whether in practice or not, are considered to be of the nature of professional misconduct.

The First Schedule and the Second Schedule list out the various types of misconduct to be avoided by members of the Institute in general, and by cost accountants in practice in particular. In accordance with Part I of the First Schedule, a cost accountant in practice shall be guilty of professional misconduct in certain cases stated hereinafter.

Apart from the above, there are some more acts of misconduct by cost accountants in practice requiring action by a High Court, which are listed in Part I of the Second Schedule.

Difference # Professional Negligence:

Professional negligence arises from the failure to perform duty or duties which might cause damage or loss to the clients. Negligence on the part of a cost accountant for not exercising restorable skill and care (that are normally expected in a task or in the performance of an assignment) constitutes a civil liability.

The Cost Auditor’s failure to perform the duties of an audit assignment in accordance with the terms and conditions of an agreement entered into between him and his client can make him responsible under the Law of Contract; but his failure, whether deliberate or unintentional, to observe the ‘code of professional ethics’ may amount to infringement of the provisions and can hold him responsible under the Cost and Works Accountants Act.

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