Professional Misconduct: ICAI Penalises CA for Skipping Mandatory Auditor Communication, Violation of Clause 8
Professional Misconduct: ICAI Penalises CA for Skipping Mandatory Auditor Communication, Violation of Clause 8
The Board of Discipline of the Institute of Chartered Accountants of India (ICAI), set up under the Act of Parliament, has issued an official disciplinary order against a chartered accountant named CA. Arpit Taneja. The CA is found guilty of professional misconduct after an investigation and hearing process. CA. Sunil Kumar is the complainant in this case, and CA. Arpit Taneja is the respondent, against whom the complaint is being filed. The respondent is alleged to have committed professional misconduct.
CA. Sunil Kumar was the tax auditor of a firm named M/s. Divyansh Associates for the financial year 2017-18. In the next financial year, CA Arpit Taneja took possession of the audit in the same company. However, CA Sunil Kumar alleged that CA Arpit Taneja did not comply with the proper ICAI procedure to perform this action. Specifically, he did not even send any written communication or a “No Objection Certificate (NOC)” from the earlier auditor, which is mandatory under Clause 8 of Part I of the First Schedule of the Chartered Accountants Act, 1949. In accordance with the ICAI rules, if a new CA wants to take possession of an audit that was previously done by some other CA, then before accepting the assignment, the new auditor must write to the previous auditor. This action is performed and considered compulsory under the rules of ICAI to maintain professional respect and avoid disputes or overlapping work. If not followed, it is considered professional misconduct.
When the case was investigated, CA Arpit Taneja admitted that he did not comply with the rule properly. Then he admitted that he had only verbal discussions with CA Sunil Kumar and believed that there was a mutual understanding between them. He claimed that he accepted the audit assignment because of personal relations as a CA. Sunil Kumar was unwell at the time, and he himself requested him to take over the audit. However, after listening to all the arguments, the court said that verbal communication is not enough; communication must be in written form as per the law.
CA Arpit Taneja also stated that he is being unfairly targeted and that CA Sunil Kumar is filing this complaint only because his son recently became a CA and started his own practice. Arpit claimed that Sunil Kumar is trying to pressure him and harm his reputation so that clients will switch to his son’s firm. He also mentioned that legal notices and other pressures were being used against him and that even confidential documents were used without permission in the complaint.
Despite all these arguments, the Board of Discipline carefully reviewed all the facts, documents, and arguments. They observed that CA Arpit Taneja did not provide any written evidence of communicating with the previous auditor. Since the law clearly requires written communication, the Board decided that the rule was broken, and hence, he is guilty of professional misconduct.
In the final order, the ICAI Board of Discipline on 19th July 2025, under Section 21A(3) of the Chartered Accountants Act, 1949, imposed a penalty of Rs. 25,000 on CA Arpit Taneja for violating Clause 8 of Part I of the First Schedule, which deals with taking over audit assignments without proper written communication with the previous auditor, alleged for professional misconduct.