The Institute of Chartered Accountants of India (ICAI) reprimanded two Chartered Accountants (CA) on ground of violation of provisions of Companies Act, 2013 in the appointment as Statutory Auditor.
The Complainant stated that he, through his firm M/s GAP & Co., was appointed as the Auditor of M/s N & M Management & Consulting Services Pvt. Ltd (“Company”) on 30.9.2014 for 5 years. However, the Company removed the Complainant firm from the position of the Statutory Auditors before the expiry of his tenure citing reasons of irrevocable differences, loss of confidence and delay in completion of work
It has been alleged by the Complainant that the Respondents failed to first communicate with the Complainant being retiring Auditor before accepting the appointment as the Statutory auditor of the Company for the F.Y. 2015-16.
Furthermore, there has been a failure on the part of the Respondents to ensure compliance with Section 140 of the Companies Act, 2013 before accepting the said appointment as Statutory Auditor of the Company for the F.Y. 2015-16.
The Board was of the view that the Respondents had failed to establish that there was a communication with the Complainant before the acceptance of the appointment as the Statutory auditor of the Company by the Respondent firm for the F.Y. 2015-16 in term of the requirements of Item (8) of Part I of First Schedule.
The Board also noted that despite being specifically asked to provide how compliance of the company law procedure with respect to the removal of the complainant from the position of the auditor of the company was ensured, no reply was received from the Respondents.
The Board reprimanded the Chartered Accountants CA Poonam Kumari and CA Vidhi Churiwala and noted that “Keeping in view the above submissions and observations, the Board was of the view that it is clear that the Respondent no. 1 and Respondent no.2 had failed to ensure compliance of Section 140 of the Companies Act, 2013 before accepting the appointment as a Statutory Auditor of the Company for the F.Y. 2015-16. Hence, the Respondent no. 1 and Respondent no.2 are Guilty of Professional Misconduct falling within the meaning of Item (9) of Part I of the First Schedule to the Chartered Accountants Act, 1949.”
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