The Institute of Chartered Accountants of India (ICAI), reprimanded a Chartered Accountant (CA), and observed that failure to report non-disclosure and non-submission of annual return under Foreign Regulation Rules is professional misconduct.
The Committee noted that the charge relates to the failure of the Respondent in reporting regarding non-disclosure and non- submission of the annual return required as per Foreign Regulation Rules in respect of foreign receipts, along with separate disclosure in income and expenditure account. The Respondent in this regard submitted that formalities regarding the FCRA account were undertaken by other independent professionals. The Committee, hence, noted that the Respondent accepted the applicability of FCRA to the trust.
As per the Foreign Contributions Regulations Act, 2010, a trust can only accept foreign contributions if it gets registered under the Act, and further, the trust is required to file an annual return under the FCRA showing the nature and amounts of foreign contributions received and the relating expenditures as well in the prescribed format.
The Committee noted that the comments in general remarks for financial year 2012-13 clearly reflect an amount of Rs. 1.41 crores in earmarked funds. However, the same were not shown in the income and expenditure account.
The Committee also noted that it is the duty of an auditor to ensure that all the laws and regulations are complied with by its client and that there is no non-compliance that needs to be disclosed/reported by an auditor. The Committee noted that despite the applicability of the FCRA Act on Trust, the Respondent has failed to report its non-compliances.
Accordingly, the Committee held him Guilty of Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, on the charge.
The Board observed that “Therefore, keeping in view the facts and circumstances of the case, the material on record, and the submissions of the Respondent before it, the Committee ordered that the Respondent CA. Rohit Tryambak Moghe, be reprimanded along with a fine of Rs.20,000/- (Rupees Twenty Thousand Only).”
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