Disciplinary Committee of The Institute of Chartered Accountants of India (ICAI) has found CA. Paresh Sumant Mokashi (M. No. 144118) guilty of professional misconduct and has ordered his reprimand along with a fine of ₹25,000. The order, dated May 17, 2024, stems from findings that Mokashi engaged in professional misconduct under Items (5), (6), and (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
The Committee’s investigation revealed that Mokashi had signed two differing sets of financial statements for M/s Laxmi Vilas Co-op Housing Society for the financial year 2013-14. The initial set was rejected by the Society’s General Body due to errors, leading Mokashi to issue a “Rectified Audit Report.” The Committee concluded that the acceptance of rectification demonstrated a failure to exercise due diligence in his professional duties.
Specific lapses included Mokashi’s failure to report the unavailability of complete accrued interest data on Fixed Deposits from the bank, instead relying on management’s calculations without qualification in his audit report. This omission led to a misrepresentation, where an initial surplus turned into a loss upon rectification. Furthermore, Mokashi failed to include the date of signing his audit report.
Despite communications sent to his registered email and physical address, Mokashi did not appear before the Committee for the hearing on March 28, 2024. The Committee proceeded with the case based on available records, concluding that Mokashi was grossly negligent, failed to disclose material facts, and did not report material misstatements known to him. The fine is payable within 60 days.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[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 CASES) RULES, 2007
[PPR-105/2017-DD/343/INF/2017/DC/1319/2020]
In Re:
CA. Paresh Sumant Mokashi (M. No. 144118)
Manorama Society, Sant Namdev Peth
Cross Road no. 2, Dist. Thane, Dombivali (East)
Dombivali-421201.
…..Respondent
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 Paresh Sumant Mokashi (M. No. 144118) (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (5), (6) and (7) of Part I 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 / through video conferencing and to make representation before the Committee on 281h March 2024.
3. The Committee noted that on the date of the hearing held on 28thMarch 2024, neither the Respondent was present before it nor was there any intimation as regard his non-appearance.
3.1 The Committee also noted that the case was earlier fixed on 19th March 2024 wherein the copy of the Findings sent at the address available in the member records of ICAI had been received back undelivered. The Committee also noted that the soft copy of the Findings of the Disciplinary Committee and the Notice for the hearing had also been sent to the email address available in the member records of ‘CAI. As per email delivery intimation for the communication of the date of hearing, the delivery of the said email had been complete.
3.2 The Committee also noted from the member records of ICAI as under:
(a) ‘KYM’ Form of the Respondent had been submitted and the same was pending with the comment ‘asking for correction’.
(b) Around 86 UDINs had been generated by the Respondent during the year 2023.
3.3 The Committee was of the view that all possible efforts have been made to ensure the delivery of the communication for hearing upon the Respondent but he chose not to represent before the Committee. Keeping in view the provisions of Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee presumed that he has nothing more to represent before it and thus, decided to consider his case for award of punishment on the basis of material available on record.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct.
5. Keeping in view the facts as well as the circumstances of the case and material on record, the Committee noted that the Respondent had signed two sets of financial statements of Mis Laxmi Vilas Co-op Housing Society (hereinafter referred to as ‘the Society’) for the financial year 2013-14. The first set was not accepted by the General Body of the Society as various errors were found in the first set. Subsequently, the Respondent re-audited the revised financial statements prepared by the Society and issued a ‘Rectified Audit Report’. There were differences in both sets. The informant had mentioned six types of errors in the financial statements. As regards the first five errors, the Respondent had submitted that the same was rectified in the second set of financial statements. The Committee noted that the acceptance of rectification itself proves that the Respondent failed to exercise the requisite diligence in the conduct of the professional duties in certification of the first set.
5.1 As regards the interest amount on Fixed Deposits, the Committee noted that the Respondent accepted that while preparing the financial statements originally, full data of accrued interest on FD was not available from the Bank and that calculation was done on the basis of Management’s own calculation. The Committee in this regard noted that if the details were not available, then the fact was required to be reported by the Respondent in his Audit Report. However, the Respondent failed to give any qualification in this regard in his audit report. A true and correct picture was not reported by the Society as when such errors were not reported, in that case, there was a surplus and after rectification of such errors, the surplus resulted in loss, which the Respondent as an auditor, failed to report.
5.2 The Respondent as an auditor also failed to mention the date on which he had signed the audit report and thus, the Respondent was not only grossly negligent in conduct of his professional duties but also has failed to disclose material fact known to him and also failed to report material misstatements known to him.
5.3 Hence, professional misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7″‘ 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. Paresh Sumant Mokashi (M. No. 144118), Dombivali be Reprimanded and also a Fine of Rs. 25,000/- (Rupees Twenty-Five thousand only) be imposed upon him payable within a period of 60 days from the date of receipt of the Order.
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(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(MRS. RANI S. NAIR, IRS REID.)
GOVERNMENT NOMINEE
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(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
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(CA. SANJAY KUMAR AGARWAL)
MEMBER
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(CA. COTHA S SRINIVAS)
MEMBER
