ICAI Drops Disciplinary Charges Against CA in DLF Audit Case, Rejects QRB-Based Misconduct Allegations:

ICAI Drops Disciplinary Charges Against CA in DLF Audit Case, Rejects QRB-Based Misconduct Allegations The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee (Bench–IV) has taken disciplinary action concerning a chartered accountant (CA) named David Jones, Engagement Partner of M/s Walker Chandiok & Co. LLP, in connection with the statutory audit of DLF Limited for the financial year 2010-11. The proceedings on the issue were begun following a communication dated January 17, 2014, by the Quality Review Board (QRB), which forwarded a technical reviewer’s report flagging alleged deficiencies in compliance with the Standard on Quality Control (SQC-1) and the Standards on Auditing, particularly SA 220 (Engagement Quality Control Review) and SA 330 (Responses to Assessed Risks). The Director (Discipline), in a prima facie opinion dated August 17, 2018, held the respondent CA prima facie guilty of professional misconduct under Clause (7) of Part I of the Second Schedule, relating to failure to exercise due diligence or gross carelessness.

Also Read

ICAI Reprimands CA for Wrongly Certifying Unabsorbed Depreciation in Tax Audit Report

The allegations primarily relate to client acceptance and continuance procedures under SQC-1, documentation and timing of the Engagement Quality Control Review (EQCR), and adequacy of audit procedures. The Respondent CA challenged the limitation, jurisdiction, and the role of the Quality Review Board. He raised key arguments, like the proceedings initiated were time-barred under Rule 12 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, and the Quality Review Board (QRB) had not suggested disciplinary action in accordance with its prescribed procedures. However, the committee rejected them all, clarifying that the QRB performs only a recommendatory role while disciplinary authority vests with the Disciplinary Directorate under Section 21 of the Act. The respondent produced all relevant documentary evidence from the firm’s Ethics and Quality Control Manual and digital audit platform, demonstrating compliance with independence, conflict checks, and client acceptance procedures. Regarding EQCR, he submitted an affidavit affirming that the review was completed before signing the audit report dated May 24, 2011, and covered all key requirements under SA 220.

Also Read

ITAT Sets Aside Order Restricting Addition to 12.5% on Alleged Hawala Purchases; Remands Matter for Re-Verification

After multiple hearings between May 2023 and December 2025, and examining the material available on record and considering both oral and written submissions, the Committee held that the Respondent CA was not guilty of professional misconduct within the meaning of Clause (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.