ICAI Holds CA Guilty For Professional Misconduct Over Failure to Communicate with Previous Auditor
The Institute of Chartered Accountants of India (ICAI) has taken action against a chartered accountant named Viral Rastogi for not informing the previous auditor before taking up the audit.
A complaint was registered by CA Rakesh Rastogi against Viral Rastogi. The complaint refers to the tax audit of M/s Rastogi Computers for the financial year 2018-10, which the respondent accepted without first communicating in writing with the previous auditor. However, as per the Chartered Accountants Act, a new auditor must first inform the previous auditor in writing before accepting an audit. The Respondent himself admitted that he failed to do so and said it happened due to an oversight. Since there was no written communication or proof that the previous auditor was informed, this failure amounts to professional misconduct under the rules of the Chartered Accountants Act, 1949.
Questions were raised about his credibility and the quality of his work, both because his name did not appear as the statutory auditor for 2018-19 on the Income Tax Department’s website. Apart from this, it was alleged that he completed the audit in just one day, which raised doubts about whether he had done the work properly.
However, the auditor showed proof from the Income Tax portal that he was properly appointed, and the Board noted that audits don’t all take the same amount of time; some can be completed quickly depending on the client’s size and work involved. Since there was no proof that he was careless or did poor work, these claims were dismissed and not treated as professional misconduct.
As a result, the only charge that could be upheld before the Board was that the Respondent did not contact the previous auditor before accepting the audit assignment. This failure amounts to professional misconduct under Item (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949.
Thus, in conclusion, according to the Board, this wrongdoing fits under Item (8) of Part I of the First Schedule of the Chartered Accountants Act, 1949, and therefore the Respondent is guilty of professional misconduct.
