Failure to Communicate with Previous Auditor: CA Professional Misconduct Explained with Cases

When you accept an audit or similar assignment that was earlier handled by another Chartered Accountant, the law requires one basic step from you. You must communicate in writing with the previous auditor before accepting the assignment.

ICAI disciplinary orders show that this requirement is enforced strictly. If you do not communicate, the ICAI treats the lapse itself as professional misconduct. No further wrongdoing is required.

We’ll discuss how non-communication alone attracts disciplinary action under the Chartered Accountants Act, 1949.

The Legal Requirement

Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949 provides that you are guilty of professional misconduct if you:

“accepts a position as auditor previously held by another chartered accountant or a certified auditor who has been issued certificate under the Restricted Certificate Rules, 1932 without first communicating with him in writing;”

This requirement applies before you accept the assignment, not after you begin work.

The purpose of this communication is to allow you to determine whether there are any professional reasons why you should not accept the assignment. These reasons commonly include unpaid undisputed audit fees, non-compliance with statutory provisions, or issues raised in previous audit reports.

Non-Communication is a Standalone Violation

ICAI decisions consistently hold that non-communication by itself is sufficient to establish misconduct. It does not matter whether the appointment is otherwise valid or whether you acted in good faith.

Even where the audit is urgent, even where the entity is a government body, and even where the previous auditor does not respond or refuses to cooperate, your obligation to communicate remains unchanged. The law does not require a reply from the previous auditor. It only requires proof that you communicated.

How ICAI Has Applied This Rule in Practice (Disciplinary Orders)

Failure to Communicate Acceptance of Audit to Predecessor CA amount to Professional Misconduct: ICAI Imposes Penalty

In a February 2024 decision relating to the statutory audit of Zila Panchayat, Balrampur, the ICAI held the incoming auditor guilty solely because he accepted the audit without communicating with the previous auditor.

The Board made it clear that the obligation under Clause (8) applies to all types of audits, including audits of government and local authorities. It further held that absence of proof of communication by itself is sufficient to establish professional misconduct. No additional lapse is required. Read Full Case Here

Failure to Communicate Acceptance of Assignments with Previous Auditors is Professional Misconduct: ICAI Reprimands CA [Read Order]

In a case decided in March 2023, a Chartered Accountant accepted tax audit assignments of entities that were earlier audited by his former firm. He argued that, having resigned from the firm, he was entitled to accept those assignments.

ICAI rejected this argument. The Board held that entitlement, contractual rights, or partnership arrangements do not replace the statutory duty to communicate with the previous auditor. The CA was held guilty solely on the ground of non-communication. Read Full Case Here

Non-Communication of Acceptance of Audit with Resigning Auditor: ICAI Penalises Two CAs with Rs. 1.25 Lakhs Fine

In January 2025, the ICAI imposed monetary penalties in two separate matters where incoming auditors accepted statutory audit assignments without communicating with resigning auditors.

The Board clarified that resignation of the previous auditor does not remove your obligation to communicate. Even where the earlier auditor has stepped down, acceptance of audit without communication is sufficient to attract Clause (8). Read Full Case Here

Undertaking of Audit not Communicated to Previous Auditor: ICAI holds CA Guilty of Professional Misconduct

In an July 2024 case, the Respondent admitted before the ICAI that no communication had taken place before he undertook the statutory audit of the company.

The Board held that this admission itself was enough to establish professional misconduct. Arguments that the previous auditor was non-cooperative or had refused to issue a No Objection Certificate were rejected. The duty to communicate exists regardless of the expected response. Read Full Case Here

ICAI Reprimands CA with Fine for Non-Communication with Previous Auditor before Accepting Appointment

In a December 2022 case, the incoming auditor claimed that he had sent a letter to the previous auditor. However, the acknowledgment was unclear, unsigned, and did not identify the recipient.

ICAI held that inadequate proof of delivery is equivalent to no communication. Since the auditor accepted the assignment without clear evidence that communication had taken place, he was held guilty of professional misconduct.Read Full Case Here

What Counts as Communication

For ICAI, communication means written intimation sent before acceptance, with proof that it reached the previous auditor. If you cannot demonstrate delivery, the ICAI will treat the case as one of non-communication.

Merely drafting a letter, sending it without proof, or relying on informal methods does not meet the requirement.

What ICAI Does Not Accept as an Excuse

ICAI disciplinary orders show that the following explanations do not justify non-communication: urgency of work, government appointment, refusal to issue NOC, silence from the previous auditor, internal disputes, or belief that communication is unnecessary.

Your obligation exists independently of these factors.

Practical Position You Should Follow

Before you accept any audit previously handled by another Chartered Accountant, ensure that written communication has been sent and that you retain proof of delivery. If you cannot demonstrate this, you should not proceed with acceptance.