ICAI Reprimands CA for Withholding Audit Working Papers and Filing Incomplete Forms 23AC & 23ACA with MCA [Read Order]

The Institute of Chartered Accountants of India ( ICAI ) has reprimanded a Chartered Accountant ( CA ), for not submitting the audit working papers and filing Incomplete Forms 23AC & 23ACA with Ministry of Corporate Affairs ( MCA ).

The Respondent - CA was the statutory auditor of M/s. Equinox Land Projects India Limited for FY 2012-13 and FY 2013-14.

The Complainant, Vineet Rai, Deputy Registrar of Companies, Registrar of Companies has raised allegations against the CA for non-submission of the working papers. The counsel of the CA has submitted that the complainant sought working papers, however, it did not mention specific papers.

The Committee observed that the CA, in the professional capacity as statutory auditor, had certified Form 23AC of M/s. Equinox Land Projects India Limited. After investigation by the Director (Discipline), the Respondent was found prima facie guilty.

The CA was found guilty firstly, despite repeated requests from the Complainant Department, the Respondent failed to produce or furnish his audit working papers in response to the notice issued.

Secondly, the CA have certified and uploaded incomplete and incorrect statutory filings, namely Forms 23AC and 23ACA, for the financial years 2012-13 and 2013-14 on the MCA-21 portal. Therefore this attracts disciplinary scrutiny limited to these lapses alone.

With regards to the second allegation, that is incompleteness of the Forms 23AC and 23ACA, the ICAI disciplinary committee noted the declaration made by the respondent - CA.

"It is hereby certified that I have verified the above particulars (including … attachment(s)) from the records of Equinox Land Projects India Limited and found them to be true and correct. I further certify that all required attachment(s) have been completely attached to this form."

Reading the above declaration, the ICAI said that the declaration includes attachments. Therefore the CA-Auditor cannot escape from the liability.

The ICAI committee observed that “the Respondent was duty bound for ensuring that all the attachment(s) required in Form 23AC have in fact been duly and completely attached to this form, however, since he failed to ensure the same in respect of Form 23AC for the financial year 2013-14, he was considered grossly negligent in his duty.”

Accordingly, the Respondent-CA was found guilty of Professional Misconduct falling within the meaning of Item (7) of Part I of Second Schedule to the Chartered Accountants Act, 1949.

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