ICAI Reprimands CA for Audit Lapses and Incomplete MCA Filings, Held Guilty for Professional Misconduct

This is a disciplinary action taken by the Institute of Chartered Accountants of India (ICAI) against a Chartered Accountant (CA) named Soumya Dutta, regarding professional lapses during his role as Statutory Auditor of Equinox Land Projects India Limited for the financial years 2012-13 and 2013-14. A complaint was registered against the CA by Shri Vineet Rai, Deputy ROC, Ministry of Corporate Affairs (MCA).

The CA was serving as a statutory auditor for a company named M/s. Equinox Land Projects India Limited for FY 2012-13 and FY 2013-14. The CA was alleged for two key non-compliances. First, when the Registrar of Companies (ROC) officially asked him to furnish audit working papers, he failed to submit them. Second is that the auditor certified and uploaded incomplete statutory forms, i.e., Form 23AC and 23ACA, on the MCA portal for the financial year 2013-14, although in a declaration, he stated that all the required attachments were complete.

When the ICAI Disciplinary Committee examined the allegation regarding the non-submission of working papers, it noted that the auditor accepted that he received a request for furnishing relevant documents in 2015, but he could not submit any copy of the request or proof that the working papers were later submitted.

The Committee held that since the audit report for FY 2013-14 was signed in September 2014, the auditor should have been positive to submit the working papers. However, he failed to furnish the same, which is a clear negligence to the professional. On the allegation of incomplete submission of statutory forms, i.e., Form 23AC and 23ACA, the Committee discovered that annexures and notes to accounts were missing from the balance sheet uploaded for FY 2013-14. Even though it was asserted by the auditor that all the required documents were fully uploaded, it was not actually the case. As per the provisions of the Company Act, notes and annexures are the key elements of a balance sheet.

Considering the aforesaid findings, the ICAI Disciplinary Committee concluded that the auditor was negligent in his profession and held CA guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The Committee has decided to impose the penalty of reprimand.