An ICAI Disciplinary Committee found CA. Anand Joshi guilty of professional misconduct. The complaint, filed by CA. Virendra Kumar Pamecha, concerned CA. Joshi accepting an audit assignment despite the previous auditor’s undisputed fees remaining outstanding. During the hearing on March 28, 2024, CA. Joshi stated he sought a no-objection from the previous auditor but was informed it would only be issued upon fee payment. He also stated his attempts to facilitate payment were met with claims of unsatisfactory work by the client. The Committee determined that the outstanding audit fees of Rs. 7,000 for FY 2015-16 were undisputed as per Central Council Guidelines 2008. Therefore, CA. Joshi should not have accepted the audit for FY 2016-17 until these fees were settled. This failure constituted professional misconduct under Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. The Committee ordered CA. Anand Joshi be reprimanded and fined Rs. 15,000, payable within 60 days of the order dated May 17, 2024.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR-192/2020-DD/194/2020/DC/1520/2021
[DISCIPLINARY COMMITTEE [BENCH-II (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B (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 CASESI RULES, 2007
JPR-19212020-DD1194/2020/DC/1520/20211
In the matter of:
CA. Virendra Kumar Pamecha
Versus
CA. Anand Joshi
Members Present:-
CA. Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, (IRS (Retd.)), Government Nominee (through VC)
Shri Arun Kumar,(IAS (Retd.)), Government Nominee (through VC)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (in person)
Date of Hearing : 28th March, 2024
Date of Order : 17th May, 2024
1. That vide Findings 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 Anand Joshi (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional Misconduct falling within the meaning of Item (1) of Part II of the 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 opportunity of being heard in person I through video conferencing and to make representation before the Committee on 28th March 2024.
3. The Committee noted that on the date of the hearing held on 28th March 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that before taking the audit assignment, he asked the previous auditor for the no-objection. However, he was not in receipt of his audit fee. The previous auditor failed to file any civil case/suit for recovery of his fees rather he cast this responsibility on the Respondent by imposing the condition that he will issue no objection only when his, fees will be duly paid by the client. The Respondent made several communications with the client/association to ensure repayment of the outstanding fee of the previous auditor, but he got the reply that his work was unsatisfactory.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct vis-a-vis verbal representation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal representation on. the Findings, the Committee observed that the amount of Rs. 7000/- reflected in the financial statements for the F.Y. 2015-16 signed by the Complainant under the head ‘Current Liabilities & Provisions’ as ‘Audit Fees Payable’ to the Complainant was clearly undisputed as per ‘Explanantion-1’ of Central Council Guidelines 2008. Thus, when the audit fee of the Complainant (being the previous auditor) for the FY 2015-16 was still outstanding, and such payment was also undisputed at the time of acceptance of audit of the Association for the FY 2016-17 by the Respondent, the Committee viewed that the Respondent should not have accepted the audit of the Association till such undisputed outstanding Audit Fees of the Complainant was paid by the Association as prescribed under Central Council Guidelines, 2008.
5.1 Hence, professional misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7th February 2024 which is to be read in consonance with the instant Order being passed in the case.
6. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to him in commensurate with his professional misconduct.
7. Thus, the Committee ordered that CA. Anand Joshi (Madhya Pradesh) be Reprimanded and also a Fine of Rs. 15,000/- (Rupees Fifteen Thousand only) be imposed upon him payable within a period of 60 days from the date of receipt of the Order.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
Sd/-
(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA. SANJAY KUMAR AGARWAL)
MEMBER
Sd/-
(CA. COTHA S SRINIVAS)
MEMBER
