No audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2012 want to know -

Is it against the code of ethics if a CA & his family has an investment in an organisation in which he is appointed as an auditor.

Is it against the code of ethics if a CA signs an un tallied balance sheet & never do audit in the same organisation as he does not have any office and staff.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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21 October 2012 1. Clause 4 of Part I of the Second Schedule to the CA Act prohibits a CA from auditing the financial statements of a firm in which he or his relatives have a substantial interest.

2. Clause 2 of Part I of the Second Schedule to the CA Act provides that a CA in practice shall be guilty of professional misconduct if he certifes an examination of financial statements unless the examination of such statements and related records has been made by him.

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2012 Thanks Siddhartha Ji,

as you wrote the word " firm ".
further to ask you what

if it is a private limited company &

the investment is done in the same company by the CA's HUF in which the CA himself is kerta.

Please guide...

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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21 October 2012 I wrote firm to specify an entity.

Any entity in which a CA or his relatives have a substantial interest is covered.

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2012 Finally to ask you
the procedure of filing a complaint against these kind of CA's who do these type of nonsense.

& may i keep my name confidential for this.

Need your guidance.

Amol S Joglekar

Amol S Joglekar (Expert)
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21 October 2012 If your stance is TRUE and CORRECT, no need to keep your name SECRET. Make a complaint on a piece of paper to the nearest ICAI office attaching the prroofs, if any, you hold.

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2012 Dear Amol Ji,
Thanks for ur guidance...

Actually i know some CA's who do this kind of activities. I think they never do internal audit & sign the un tallied balance sheets also.

I think they have powerful jack in ICAI, & because of that they do this kind of nonsense even though they know about the Code of Ethics.

I am planning to send all the documents of proof along with an application to ICAI.
but please guide me name of the person to whom it is to be addressed & r u sure that ICAI will take proper action against them & cancell their membership no.

Reply plz....

Amol S Joglekar

Amol S Joglekar (Expert)
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22 October 2012 It is to be addressed to the desciplinery committee and not to any any person. Person may come and go, but the committee remains forever.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2012 ya,
but i don't think that ICAI will cancel their membership nos...

but can't keep myself calm also as these people create a bad image of their profession.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2012 but i don't think that ICAI will cancel their membership nos...

but can't keep myself calm also as these people create a bad image of their profession.

Amol S Joglekar

Amol S Joglekar (Expert)
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22 October 2012 The punishment depends upon the kind of "unethical" practice, misconduct in profession, false certification, misrepresentation and so on. As you rightly said, this should be brought to the notice of ICAI. Sooner the better.

Querist : Anonymous

Querist : Anonymous (Querist)

23 October 2012 THANKS AMOL JI....
WILL DO THE NEEDFUL AT THE EARLIEST.

Amol S Joglekar

Amol S Joglekar (Expert)
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23 October 2012 Please write to me in case of any help needed in this regards.

Querist : Anonymous

Querist : Anonymous (Querist)

23 October 2012 Sure....
May i have your mail id sir...

Amol S Joglekar

Amol S Joglekar (Expert)
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23 October 2012 amolshankar@gmail.com