The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) issued an order on May 16, 2024, reprimanding CA. Kaushal Kishor Singh for professional misconduct. The Committee found him guilty under Item (8) of Part I of the First Schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. The complaint, filed by CA. Kusum Goyal, alleged that CA. Kaushal Kishor Singh accepted an audit assignment without properly communicating with the previous auditor and despite the knowledge of outstanding audit fees owed to the complainant’s firm. Despite CA. Kaushal Kishor Singh’s apology and claim of receiving a No Objection Certificate and payment for past dues, the Committee determined that the payment to the previous auditor occurred after he accepted the audit, violating Council Guidelines. The Committee emphasized that communication with the previous auditor is crucial to safeguard professional interests and public trust. Consequently, the Committee decided to reprimand CA. Kaushal Kishor Singh, deeming it an appropriate punishment for the established professional misconduct.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 19491
ORDER UNDER SECTION 218(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007.
PR/434/2019/DD/29/2020/DC/1555/20221
In the matter of:
CA. Kusum Goyal
Versus
CA. Kaushal Kishor Singh
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri Jiwesh Nandan, LAS (Retd.), Government Nominee (In person)
3. MS. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
4. CA. Mangesh P Kinare, Member (In person)
5. CA. Abhay ChhaJed, Member (In person)
DATE OF HEARING : 28th MARCH, 2024
DATE OF ORDER : 16th May, 2024
1. That vide Findings dated 05.02.2024 under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee was inter-alia of the opinion that CA. Kaushal Kishor Singh (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (8) of Part I of First Schedule and Item (1) of Part II of Second Schedule to the Chartered Accountants Act, 1949.
2, That pursuant to the said. Findings, an action under Section 21B(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 28th March 2024.
3. The Committee noted that on the date of hearing on 28th March 2024, the Respondent was not present. The Committee also noted that the Respondent, vide email dated 23.03.2024, has apologized for not being able to participate in the scheduled hearing on account of illness, and prayed to the Committee for leniency in the matter. The Committee further noted that the Respondent had submitted his written representation dated 15th March 2024 on the Findings of the Committee, which, inter-alia, are given as under:-
a. The Respondent received a No Objection Certificate (NOC) from M/s KC Goyal and Associates for undertaking the audit assignment of M/s Plaza Enterprises (Prop. Anil Kumar, PAN ABLPK0295M) on 16th March 2020. Additionally, M/s Plaza Enterprises has made a payment of Rs 2,80,728/- towards the full and final settlement of dues up to the date of receiving the audit assignment.
b. That No Due Certificate obtained from the Complainant stated that no audit fee is outstanding, and M/s Plaza Enterprises is free to obtain professional services from any other Chartered Accountant.
c. The Respondent requested the Committee for leniency and spare him from harsh punishment.
4. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-a-vis written representation of the Respondent. The Committee noted that the issues/ submissions made by the Respondent as aforestated have been dealt with by it at the time of hearing under Rule 18.
5. Thus, keeping in view the facts and circumstances of the case and material on record including written representation of the Respondent on the Findings, the Committee was of the view that, as per the Code of Ethics, the objective of communicating with the previous auditor is that the member may have an opportunity to know the reasons for the change in order to be able to safeguard his own interest, the legitimate interest of the public, and the independence of the existing accountant. Therefore, the plea of Respondent that he was preoccupied in other assignment(s) cannot be accepted as the basis for non-compliance of this requirement. The Committee noted that the Respondent had accepted his mistake that he did not communicate With the previous auditor (Complainant’s firm) prior to acceptance of audit assignment.
6. The Committee noted that the Respondent was well aware of pending audit fee payable to the Complainant while accepting the appointment as the Tax Auditor as he has mentioned in his written statement that he was assured by the proprietor of the Enterprise that he will clear the pending audit fee to the Complainant. The Committee also noted that the Complainant objected that the impugned tax audit assignment undertaken by Respondent pertained to FY 2018-2019 whereas the undisputed audit fee as evidenced by the bank statement of the entity MIS Plaza Enterprises reflect the fact that it was paid on 16th March 2020. The Committee was of the view that it is evident from the above, that undisputed audit fee as reflected in Balance Sheet was paid to Complainant on 16th March 2020 which was after the date of acceptance of audit assignment by the Respondent which is in violation of Council Guidelines. Accordingly, the Committee held that there was non-compliance on the part of Respondent in ensuring the payment of undisputed audit fee. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 05th February 2024, which is to be read in consonance with the instant Order being passed in the case.
7. Accordingly, the Committee was of the view that the ends of justice would be met if punishment is given to him in commensurate with his Professional Misconduct.
8. Thus, the Committee ordered that the Respondent i.e., CA. Kaushal Kishor Singh, be REPRIMANDED, under Section 216(3)(a) of the Chartered Accountants Act,1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
Sd/-
(CA. MANGESH P KINARE)
MEMBER
