ICAI Reprimands CA for Auditing Company Where His Brother Was Director

The Institute of Chartered Accountants of India (ICAI) has reprimanded a chartered accountant after finding out that he had audited a company in which his brother was a director and held a major interest.

The complaint was filed by Mandeep Singh, who alleged that CA Udit Bansal had accepted the statutory audit of M/s Anant Sourcing Management Services Pvt. Ltd for the FY 2013-14, as he was the brother of Shri Mudit Bansal, who held 55% shareholding and was also a director of the company. The company’s financials were signed by the respondent.

The respondent auditor accepted his misconduct and said that he was in the initial years of his practice when he took up the audit assignment. He also apologized for the mistake and requested leniency.

The ICAI Disciplinary Committee noted that the explanation submitted by the respondent was insufficient. It noted that the Respondent had violated the mandatory provisions of the Companies Act, 2013, and the Code of Ethics, which restricts a chartered accountant from accepting an audit in a company where his relative is a director or holds substantial interest.

Considering these facts, the Committee held the Respondent, i.e., CA Udit Bansal, GUILTY of professional misconduct under Clause (4) of Part I and Clause (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. The committee reprimanded him under Section 21B(3)(a) of the Chartered Accountants Act, 1949.