NOC from Previous auditor

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Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2011 How much time to wait for NOC/any communication from previous auditor after sending letter to him.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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24 June 2011 15 days minimum.

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2011 Thanks Aditya,
In a case I have send the letter to previous auditor on 17 May asking any objection or not and on 5 June I recd a letter from previous auditor stating that he has objection (No reason was mentioned). I have again sent a letter on 6 June that "mere saying that you have objection without stating any reason/ground, is not a valid objection"
Again I recd a letter from previous auditor on 24 June that he has not received his audit fees and hence he has objection on my accepting the said audit.
What should I do Now, I have already signed the audit report on 20 June

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2024 Navigating a situation where your previous auditor has raised objections related to unpaid fees can be complex. Here’s a structured approach to handling this matter:

### 1. **Understanding the Situation**

1. **Objection Raised:** Your previous auditor raised an objection citing unpaid audit fees. This can be a common issue when transitioning between auditors.

2. **Timing of Responses:** You've waited several weeks for responses, and the auditor's latest communication indicates that the objection is due to outstanding fees.

3. **Audit Report Status:** You signed the audit report on June 20, after receiving the auditor's objections.

### 2. **Steps to Take**

1. **Addressing the Fees Dispute:**
- **Immediate Payment:** If feasible, settle the outstanding audit fees with the previous auditor. This can often resolve objections and facilitate the issuance of the No Objection Certificate (NOC).
- **Negotiation:** If immediate payment isn't possible, consider negotiating a payment plan or partial settlement. Ensure to document any agreements in writing.

2. **Document Communication:**
- **Keep Records:** Maintain detailed records of all correspondence with the previous auditor. This includes your initial request for the NOC, their responses, and any settlement agreements.
- **Acknowledge Objection:** Formally acknowledge the auditor's objection and state your intention to resolve the fee dispute.

3. **Seek NOC Despite Objections:**
- **Formal Request:** Send a formal letter reiterating your request for the NOC, emphasizing that the objection needs to be specified in detail and addressed accordingly.
- **Propose Resolution:** Offer a clear plan to resolve the fee dispute and request the NOC as a gesture of goodwill while you work on settling the fees.

4. **Consult New Auditor:**
- **Inform New Auditor:** Make sure your new auditor is aware of the situation. They might provide advice on handling the previous auditor's objections and how to proceed with the revised audit report.

5. **Legal Advice:**
- **Seek Legal Counsel:** If the dispute over fees remains unresolved or if there is potential for legal action, consulting with a legal professional specializing in accounting disputes might be necessary.

6. **Regulatory Complaint:**
- **File Complaint:** If the previous auditor’s actions are unjustified or if you believe they are not adhering to professional standards, you can file a complaint with the Institute of Chartered Accountants of India (ICAI). Provide detailed documentation of the issue and their responses.

### Sample Response Letter to Previous Auditor:

---

**[Your Letterhead]**

**Date:** [Insert Date]

**To,**
**[Previous Auditor’s Full Name]**
**[Previous Auditor’s Firm Name]**
**[Firm’s Address]**
**[City, State, PIN Code]**

**Subject:** Response to Objection Raised and Request for NOC

Dear [Previous Auditor’s Name],

I acknowledge receipt of your letter dated June 24, 2024, in which you raised an objection to the issuance of the No Objection Certificate (NOC) citing unpaid audit fees.

I understand your concern regarding the outstanding fees. I am currently taking steps to resolve this issue, and I am committed to settling the dues promptly. I would appreciate if you could provide a detailed statement of the outstanding fees so that I can address the payment as soon as possible.

In the interim, I request that you issue the NOC as a gesture of goodwill while we work towards resolving the payment matter. This will facilitate the transition to the new auditor and ensure that there are no delays in our financial reporting.

Please confirm the amount due and any payment instructions at your earliest convenience. I assure you of my commitment to settling this matter and look forward to your cooperation.

Thank you for your attention to this matter.

**Sincerely,**

**[Your Full Name]**
**[Your Contact Information]**
**[Your Company’s Name]**
**[Your Company’s Address]**

---

### Conclusion

Resolving the issue with your previous auditor involves addressing the fee dispute, maintaining detailed records, and possibly involving new or legal counsel if necessary. Acting promptly and professionally will help in navigating this transition smoothly.

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