ICAI Disciplinary Board Dismisses Misconduct Allegation Against CA Due to Lack of Evidence

The case started between two chartered accountants, CA Ajay Bhargava (Complainant) and CA Vivek Beriwal (Respondent). CA Vivek Beriwal joined a partner in the firm M/s Bhargava Ajay & Associates on 01.01.2015. The complainant claimed that due to unethical conduct, he was relieved from the firm.

After his exit, the complainant accused that CA Beriwal started his own firm under “M/s Beriwal Vivek & Associates” and took audit assignments of the complainant’s clients without obtaining a No Objection Certificate (NOC). The case was placed before the Board of Discipline constituted under Section 21A of the Chartered Accountants Act, 1949.

Complainant’s Allegations

The complaint made the following key allegation against the respondent:

• He signed the documents of Alveo Healthcare Pvt. Ltd on behalf of his firm for five years. He signed the backdated consent letters and financial statements after being relieved from the firm.
• He demanded Rs 5,00,000 from the Complainant for withdrawing from the Multipurpose Empanelment Form (MEF).
• He took away all important client records and business documents after leaving the firm without permission.
• He received and kept audit fees amounting to Rs 2,10,000 for FY 2016-2019, which the respondent never refunded.

Respondent’s Explanation

The respondent, however, argued that the complainant never alleged him of withholding audit working papers or engagement documents. Additionally, the Respondent stated that some documents are of a personal nature, other than the firm’s property, and are needed to clear dues. He also said that the Complainant failed to provide those documents, which, according to him, prove that the allegations are false and baseless.

Board of Discipline Final Decision

The Board observed that the complainant failed to give any evidence to show that the respondent had taken documents from his firm when he was relieved from his firm. The board also concluded that the auditor has the responsibility of keeping the audit working paper, which is the property of the audit. Since CA Vivek Beriwal signed the financial statements, he kept the ownership of those documents. The Complainant had no claim over them.

After careful examination, the Board of Discipline concluded that the complainant failed to substantiate the claim that documents were taken without consent, and there was no evidence of fraud or misconduct by the Respondent.

Therefore, the board held that the respondent was not guilty of other Misconduct under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.