The disciplinary committee of the Institute of Chartered Accountants of India (ICAI) has permanently removed Ex-Statutory Auditor of Amrapali Group following the housing scam along with a fine of Rs. 5 lakh.
Relying on the Supreme Court observations against the Chartered Accountant, the disciplinary committee observed that the CA had failed to act independently while conducting audit of the Amrapali Group of Companies.
“He had failed to disclose material facts, and he also failed to report the material misstatement that existed in the financial statements. In the absence of working papers, it is also evident that the Respondent had failed to obtain sufficient audit evidence to express opinion on financial statements., Moreover, the Respondent had connived with the management of Amrapali Group in manipulation of accounts and was controlling many Group Companies, which were founded only for the purpose of transferring funds. Such acts were highly unbecoming of Chartered Accountantand such a person was not fit to be a member of the Institute,” the ICAI disciplinary committee said.
The Committee further noted that the extent of damage and the turmoil caused to large number of home-buyers in the instant matter had invited public attention; and the role of the auditor was called into question, and presented in a contrasting perspective marring the image of a Chartered Accountant.
“Public interest cannot be allowed to fall victim to the irresponsible conduct of auditor; and the present context imbues them with magnified significance. To put it tersely, the acts of omission and commission of statutory auditor in discharge of his professional duties also contributed to the damage and complexity of this large magnitude.,” the committee added.
“The acceptance of the findings of Forensic Auditors by the Hon’ble Supreme Court which inter-alia talks about the role of auditor and his failure in discharge of professional duties, is also a resounding endorsement of the culpability of the auditor which makes it enormously high. The Committee opined that failure of the statutory auditor in reporting wrongdoings and mismanagement in the affairs of these entities, of this magnitude and gravity has to be dealt with sternly; and therefore this is a case deserving of severe punishment,” the order said.
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