ICAI Disciplinary Committee Reprimands CA  for Improper Withdrawal of Signed Audit Report

The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) initiated proceedings against CA Sumit Khandelwal based on a complaint filed by a representative of Express View Apartment. The Respondent was appointed to audit the financial statements of the entity for the Financial Year 2017-18. After conducting the audit and signing the audit report, the Respondent withdrew the signed report and issued a revised version.

The complainant alleged that this withdrawal was done improperly and without valid grounds, causing professional and legal complications for the entity.

Issue Raised: Whether the Chartered Accountant committed professional misconduct by withdrawing a signed audit report and issuing a revised one without following the established auditing standards and procedural safeguards.

Committee’s Order: The Disciplinary Committee held the Respondent GUILTY of Professional and ‘Other’ Misconduct. The Committee found him liable under Clause (2) of Part IV of the First Schedule and Clause (1) of Part II of the Second Schedule of the Chartered Accountants Act, 1949. The Bench observed that once an audit report is signed and issued, it becomes a final document. Any later revision or withdrawal must be strictly in accordance with the Standards on Auditing (SAs).

The Committee noted that the Respondent failed to demonstrate sufficient cause or follow the mandatory protocols for such a withdrawal, thereby compromising the integrity of the audit process and violating the code of ethics.

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