Audit of an other state company & noc from previous auditor

Hello Mr. Yash,

CA in Mumbai CAN do an audit of company whose regd office is in Goa. ICAI has issued self regulatory measures but they are in respect of branch audit and joint audit and these measures are voluntary and not mandatory. Hence for audit of company itself, such CA in Mumbai will not face any problem.

In respect of communication with previous auditor, if you refer Clause 8 of Part I of Schedule First to CA Act, it is clearly mentioned that communication with previous auditor IN WRITING is an absolute condition and has to be followed in any audit.

Incoming auditor shall communicate in such a manner that he will have positive evidence of RECEIPT OF SUCH COMMUNICATION BY RETIRING AUDITOR. Hence, telephonic conversation will not be proper.

In respect of an e-mail, that too will not be proper since you will not have a positive evidence that it is received by retiring auditor (since in e-mail, something like delivery report etc. will not come and non receipt of failure notice doesn’t mean that it is received by the intended person).

Hence, you will have to opt for speed post or registered AD.

In respect of decline of previous auditor to NOC, your opinion is correct.

All the aforesaid answers are as per my knowledge, hence kindly rectify me if Im wrong somewhere.

Originally posted by : Yogesh Shah
	Hello Mr. Yash,   CA in Mumbai CAN do an audit of company whose regd office is in Goa. ICAI has issued self regulatory measures but they are in respect of branch audit and joint audit and these measures are voluntary and not mandatory. Hence for audit of company itself, such CA in Mumbai will not face any problem.   In respect of communication with previous auditor, if you refer Clause 8 of Part I of Schedule First to CA Act, it is clearly mentioned that communication with previous auditor IN WRITING is an absolute condition and has to be followed in any audit. Incoming auditor shall communicate in such a manner that he will have positive evidence of RECEIPT OF SUCH COMMUNICATION BY RETIRING AUDITOR. Hence, telephonic conversation will not be proper. In respect of an e-mail, that too will not be proper since you will not have a positive evidence that it is received by retiring auditor (since in e-mail, something like delivery report etc. will not come and non receipt of failure notice doesn’t mean that it is received by the intended person). Hence, you will have to opt for speed post or registered AD.   In respect of decline of previous auditor to NOC, your opinion is correct.   All the aforesaid answers are as per my knowledge, hence kindly rectify me if Im wrong somewhere.

AGREED WITH YOGESH.

Thanks Yogesh!

Now, just want to ask one last question. What if I do not hear back from the previous auditor? After waiting for how many  days can I deem that the previous auditor has no objection if I do not receive anything from him? About 10 days?

Originally posted by : Yash Rungta
	Thanks Yogesh! Now, just want to ask one last question. What if I do not hear back from the previous auditor? After waiting for how many  days can I deem that the previous auditor has no objection if I do not receive anything from him? About 10 days?

Hello Mr. Yash,

When I read professional ethics in my class book, I didn't find any clear wording about such duration except that incoming auditor shall wait for reasonable time period. So, I think, 10 days from the date when previous auditor RECEIVED YOUR COMMUNICATION is sufficient because limited time period for audit will not allow you to wait for more days since it will ultimately delay in further proceedings.

'Conditional Acceptance' (i.e. Auditor can start IMP - and only IMP not the whole - work immediately without waiting for reply) is applicable in Govt Audit only and in your case it wil not be applicable.

But, I would like to suggest to give second reminder also if you don't get any reply from previous auditor. In such second letter, you clearly mention that if no reply is received even after this then it shall be deemed that you (i.e. previous auditor) don't have any objection.

Again I would like to metion that kindly rectify me if its wrong since such communication is totally practical aspect (which I have not yet handled since Im still an article) plus such second reminder is not mentioned in ethics, Im just suggesting. If its right go for it.