The Madras High Court has ordered to conduct a Special Audit for the Institute of Chartered Accountants of India (ICAI) in three months after considering the allegations raised by a Chartered Accountant.
Justice S M Subramaniam was considering a petition by Mr. V Venkata Siva Kumar, a Chartered Accountant wherein the petitioner sought for an order directing the Central Government to cause a Special Audit of the financial statement of the ICAI by an independent body like Comptroller and Auditor General of India for the period 2011 to 2015 as per the provisions of Section 18(5), (5a) and (5b) of Chartered Accountants Act, 1949 along with a few suggestions for improving the transparency and accountability in the operations of the ICAI.
Disposing the petition, the Court held that, “In the present case, the petitioner-in-person states that no such Special Audit as contemplated was conducted and the serious objections raised by the petitioner were not looked into by the Council. In this regard, many other ordinary members raised their respective objections, which were also not considered by the Council. When several members are raising such objections with reference to the Audit conducted, then the Council ought to have considered the same objectively and order for Special Audit to be conducted in order to develop transparency and trust in the matter of dealing with the finance of the Institute.”
“No doubt, Special Audit is to be conducted only in the event of falsehood or irregularity or illegality. In the present case, the petitioner raises several objections with reference to the financial aspects and he states that other members also raised similar objections for conducting Special Audit,” the Court said.
Concluding the order, the Court held that “In view of the facts and circumstances, the petitioner is at liberty to submit his detailed objections or otherwise, to the Central Council of Institute of Chartered Accountants of India, within a period of four weeks from the date of receipt of a copy of this order. In the event of submitting any such objection by the petitioner or by any other member of the Institute, the Central Council of the Institute of Chartered Accountants of India shall consider the objections and if there is any irregularity, doubt, falsehood or otherwise, then conduct Special Audit into the allegations or otherwise raised and thereafter communicate the result to the petitioner, within a period of three months from the date of submission of the objections by the petitioner.”
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