The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee found CA. Naveen Kumar Khairari guilty of professional misconduct. The committee’s findings, dated October 16, 2024, concluded that the respondent violated two schedules of the Chartered Accountants Act, 1949. The misconduct stemmed from his firm, M/s N KA K & Co., accepting a tax audit assignment without first communicating with the previous auditor, M/s. KC Goyal & Associates. Additionally, the respondent accepted the assignment despite knowing that the client had not yet paid the previous auditor’s outstanding fees.
During a hearing on December 11, 2024, the respondent apologized, attributed the oversight to his workload, and stated that the client had since settled the previous auditor’s fees. However, the committee rejected his explanations, emphasizing that an auditor’s independence and professional obligations, such as communicating with a predecessor, take precedence over workload. The committee’s final order, dated January 20, 2025, reprimanded the respondent and imposed a fine of Rs. 10,000, to be paid within 60 days.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Setup 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/614/22/DD/504/2022/DC/1843/2023]
In the matter of:
CA. Kusum Goyal
Versus
CA. Naveen Kumar Khairari
MEMBERS PRESENT:
1. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
3. Mangesh P Kinare, Member (In person)
4. Abhay Chhajed, Member (In person)
DATE OF HEARING : 11th DECEMBER 2024
DATE OF ORDER : 20th January 2025
1. That vide Findings dated 16.10.2024 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. Naveen Kumar Khairari (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 the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 218(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 11thDecember 2024.
3. The Committee noted that on the date of the hearing on 11thDecember 2024, the Respondent was pre ant through video conferencing. During the hearing, the Respondent is apologized for his mi take and stated that he has cleared all the dues of the Complainant. The Committee also notice the written representation of the Respondent dated 01st November 2024 on the Findings of the Committee, which, inter alia, are given as under:-
(i) The non-compliance occurred due to time limitation and workload as it was the last month of Tax Audits for F.Y 2020-21.
(ii) There is no dispute between the Respondent and the Complainant.
(iii) That all dues of the pervasion auditor were cleared by the Company after filing of the instant Complaint.
(iv) He admitted that the Respondent’s Firm has not done prior communication with the pervious Auditor before completing the ‘Tax Audit’.
(v) The Respondent prayed for leniency in the matter.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent ‘Guilty’ Professional Misconduct vis-à-vis written and verbal representation of the Respondent. The Committee noted that the issues/ submissions made by the Respondent as afforested have bee dealt with by it at the time of hearing under Rule 18.
5. Thus, keeping in in view the facts and circumstances of the case, material on record including written an was of the view that auditor is that the order to be able to independence of t preoccupied in other requirement. The Co not communicate with assignment.in view the facts and circumstances of the case, material on record verbal representation of the Respondent on the Findings, the Committee s per the Code of Ethics, the objective of communicating with the previous ember may have an opportunity to know the reasons for the change in afterguard his own interest, the legitimate interest of the public, and the e existing auditor. Therefore, the plea of Respondent that he was assignment(s) cannot be accepted as the basis for non-compliance of this Committee noted that the Respondent had accepted his mistake that he did h the previous auditor (Complainant’s firm) prior to acceptance of audit
6. As regards the outstanding audit fee of the previous auditor for the financial year ended aid, the Committee observed that despite knowing that audit fees were us auditor, the Respondent had accepted and completed the tax audit of the client. The Committee noted that undisputed audit fee was paid to Complainant in the month of April 2023 which was after the date of acceptance of audit assignment by the Respondent. Hence, the Respondent had violated the requirement of Chapter VII of the Council General Guidelines, 2008. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 16th October 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. Naveen Kumar Khairari , be REPRIMANDED and also imposed a fine of Rs. 10,000/- (Rupees Ten thousand only) upon him, which shall be paid within a period of 60 (sixty) days from the date of receipt of the Order.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER)
Sd/-
{CA. ABHAY CHHAJED)
MEMBER
