Pursuant to the decision taken by the Council at its 442nd meeting, the Institute of Chartered Accountants of India has enabled a structured mechanism on the UDIN Portal for capturing details of the preceding auditor at the time of UDIN generation by the succeeding auditor. This functionality has been introduced in two specific categories GST & Tax Audit and Audit & Assurance Functions with the objective of strengthening audit continuity, ethical compliance, and professional discipline, while simultaneously safeguarding confidentiality.
It is important to note at the outset that all information captured under this module is system-encrypted and is not visible to the UDIN verifier or any external stakeholder. The data is intended solely for internal regulatory oversight, disciplinary traceability, and maintenance of an audit trail.
Trigger Question: Applicability of Preceding Auditor Details
During UDIN generation, the portal first prompts the member with the question:
“Is capturing details of the preceding auditor applicable to this audit/form?”
The member may select Yes or No.
If No is selected, the system does not require any preceding audit-related disclosures, and the member may proceed directly with UDIN generation. If Yes is selected, a structured decision tree is activated, requiring further disclosures depending upon the factual audit situation.
Step 1: Status of Previous Year’s Audit
Upon selecting Yes, the portal presents the next question:
“Have you issued the tax audit report to the client in the previous/last year?”
The available options are Yes, No, and First Year of Audit, each carrying distinct compliance implications.
Scenario 1: Audit Report Issued in the Previous Year (“Yes”)
Selection of Yes implies that the same auditor or audit firm conducted the audit in the immediately preceding year. In such cases, the succeeding auditor is required to enter the UDIN of the previous year’s audit report. Where available, the system may also allow selection of the earlier UDIN from a dropdown list.
This mechanism creates a digital continuity chain between successive audit reports, reinforcing traceability and significantly reducing the risk of forged, duplicated, or back-dated attestations.
Scenario 2: Change of Auditor (“No”)
Where No is selected, it indicates that a change of auditor has occurred. In such circumstances, the portal requires disclosure of limited yet critical professional information aligned with long-standing ethical norms.
The succeeding auditor is required to furnish the MRN of the previous auditor and indicate whether professional communication regarding appointment has been made. If communication has been made, the date of communication must be selected from the calendar; if not, the member may proceed without entering a date. In addition, the member must disclose the status of outstanding professional fees, selecting from Yes, No, or Not Known.
These disclosures preserve ethical transparency without exposing sensitive commercial details to clients or third parties.
Scenario 3: First Year of Audit
Selection of First Year of Audit signifies that the audit engagement is being undertaken for the first time and that there is no immediately preceding audit report. In such cases, the member may proceed without linking a prior UDIN.
However, where a prior auditor existed in some other capacity, the system may still require entry of the MRN of the previous auditor, along with disclosure of communication status, date of communication (if applicable), and outstanding fee status. This ensures that even first-time audits adhere to a minimum ethical disclosure framework.
Confidentiality and Regulatory Safeguards
A critical safeguard embedded in this functionality is that none of the preceding auditor details are visible to the UDIN verifier. All information is encrypted and retained exclusively for internal ICAI purposes relating to systemic integrity, regulatory monitoring, and disciplinary oversight.
Why This Matters
This enhancement represents a significant evolution of the UDIN framework. It encourages ethical auditor transition, digitally documents professional communication norms, prevents suppression of prior audit history, and strengthens audit accountability without compromising client confidentiality.
In effect, the “Preceding Year’s Audit Details” module transforms UDIN from a mere identification number into a structured professional compliance instrument, aligned with auditing standards and ethical governance.
Statutory Background: Clause 8 as the Ethical Anchor
The legal foundation of the NOC requirement lies in Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949, which provides that a Chartered Accountant shall be deemed guilty of professional misconduct if he accepts an audit position previously held by another Chartered Accountant without first communicating with him in writing.
Despite the clarity of this provision, its compliance has historically been uneven. In practice, it has often been treated as mandatory only for statutory and tax audits, while being diluted or ignored for other attest and assurance engagements. This perception is both legally and ethically flawed. The scope of Clause 8 extends to all engagements where an audit position previously held by another Chartered Accountant is accepted, irrespective of nomenclature or duration.
Reinvention of Clause 8 through UDIN
Viewed in this context, the Preceding Year’s Audit Details module does not create a new compliance burden; rather, it technologically reinforces an existing ethical rule.
The integration mandates disclosure during UDIN generation, captures MRN, communication status, date of communication, and fee status, links prior UDINs where applicable, encrypts all data, and ensures zero visibility to external users. Importantly, the system does not adjudicate disputes, demand NOCs, or block appointments. Instead, it creates a verifiable digital audit trail, discourages casual non-compliance, and equips ICAI with factual data for disciplinary review where necessary.
Why the Question of NOC Still Matters
The requirement of communication with the previous auditor—commonly referred to as obtaining an NOC—is not a procedural formality. It is a statutory ethical mandate embedded in the professional DNA of the Chartered Accountancy profession. Long before digital platforms like UDIN existed, this requirement functioned as a safeguard for audit independence, professional discipline, and orderly auditor transition.
By integrating this requirement into the UDIN Portal through the Preceding Year’s Audit Details module, the Council has effected a decisive shift—from a paper-based, loosely monitored obligation to a digitally recorded, system-driven compliance checkpoint.
Modes of Communication: What Constitutes Compliance
The Council has consistently clarified that communication must actually reach the retiring auditor, and the burden of proof rests with the incoming auditor. Mere dispatch is insufficient.
Recognised modes of valid communication include hand delivery with acknowledgement, registered post with acknowledgement due, and email supported by delivery or read receipts. Only when credible evidence of such communication exists can the engagement be ethically accepted.
Conclusion
The UDIN-era redesign restores Clause 8 to its rightful place—not as a weapon of obstruction, but as a neutral governance instrument. It neither enables coercion nor undermines commercial realities. Instead, it preserves ethics, continuity, and professional dignity in auditor transitions.
In essence, the Preceding Year’s Audit Details module converts an abstract ethical obligation into a measurable, traceable, and enforceable professional standard, without compromising confidentiality or independence.
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