The Institute of Chartered Accountants of India (ICAI) has made a decisive move, passing an order against auditing powerhouse EY's three affiliates and a retired partner, alongside disciplinary action against S V Ghatalia & Associates, LLP, and its partner for "professional misconduct."
In its recent order dated April 25, the ICAI's disciplinary committee directed the implicated firms and individuals to immediately cease their existing arrangements with multinational entities. This action comes as the committee found such arrangements to be circumventing the provisions of the Chartered Accountants Act, 1949.
Among the entities targeted by the disciplinary action are S R Batliboi & Associates, LLP; SRBC & Co, LLP; S R Batliboi & Co LLP, along with retired partner Raj Kumar Agrawal. In response to the order, SRBC & Co LLP expressed disappointment, emphasizing their commitment to adhering to rules and applicable laws. They affirmed their intention to review the order thoroughly and take necessary action, leveraging all available legal remedies.
The disciplinary committee's ruling includes the removal of Raj Kumar Agrawal's name from the institute's register of members for three years, alongside a fine of Rs 5 lakh for each case. Similarly, Tridibes Basu faces the removal of his name from the register for three years in the case of S V Ghatalia & Associates, LLP, accompanied by a Rs 5 lakh fine.
The committee cited the involvement of the implicated firms and individuals in joining international entities and engaging in referral work as constituting professional misconduct. It highlighted the use of visiting cards and email IDs closely associated with multinational entities, indicating a lack of independence and potential influence over prospective clients.
Furthermore, the committee underscored that such practices aimed at reaping the benefits of affiliation with multinational entities for influencing clients or the public amounted to professional misconduct under the Chartered Accountants Act, 1949.
The ICAI's actions underscore its commitment to upholding professional standards within the accounting industry and ensuring compliance with regulatory frameworks.
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