Failure to Report Material Misstatement in Financial Statements Amount to Misconduct: ICAI [Read Order]
Failure to Report Material – Misstatement in Financial Statements Amount to – Misconduct – ICAI – TAXSCAN
Failure to Report Material – Misstatement in Financial Statements Amount to – Misconduct – ICAI – TAXSCAN
The Institute of Chartered Accountants of India(ICAI) has held that failure to report material misstatement in financial statements amount to misconduct.
CA. Deelipkumar Bhikubhai Desai, the Respondent being Statutory Auditor of M/s Coastal Marine Construction & Engineering Limited (the Company) for the financial year 2014-15 had not made the disclosure in "Notes to Accounts” in accordance with Section 22 of Micro, Small and Medium Enterprises Development Act,2006 regarding outstanding dues to the Complainant Company despite he was apprised of omission.
The Committee noted that as per Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006, the Company is liable to make payment on or before the date agreed upon with the Complainant Company in writing and if there is no agreement on this behalf then before the appointed day.
A Coram comprising Mrs Rani Nair, Shri Arun Kumar, C A Cotha S. Srinivas observed that “the Respondent not only failed to report material misstatement in Financial Statements but also is grossly negligent in adherence of disclosure requirement relating to MSME in Annual Statements of Accounts as per Section 15, 16, and 22 of MSME Act, 2006.”
The Committee held that the Respondent is guilty of Professional Misconduct falling within the meaning of Items (6) and (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
To Read the full text of the Order CLICK HERE
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