He lost a 36-year audit to his former article, then asked the client for it back

A firm had audited the same group of colleges for thirty-six years. For 2018-19 the governing body appointed someone else — a chartered accountant who had served his articleship at that very firm years earlier, and had since set up his own practice.¹

The incoming auditor sent the letter he is required to send.² The outgoing auditor did not reply to him. He wrote to the client instead. That letter, and not the lost audit, is what took him to the Board of Discipline in BOD 631/2022.³

What was held#

Guilty of professional and other misconduct under Item (6) of Part I and Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 — and reprimanded.

The charge#

Two clauses, both First Schedule, which is why the Board of Discipline heard it rather than the Disciplinary Committee.⁴

• Item (6) of Part I — soliciting professional work, directly or indirectly.⁵
• Item (2) of Part IV — conduct which brings disrepute to the profession.⁶

Neither is about the quality of an audit. Both are about how a member behaved when he lost one.

What happened#

Told he had been replaced, the outgoing auditor sent an undated letter to the principals of the client colleges.⁷ Three passages did the damage:

your accounts are very complicated, and an inexperienced person cannot handle it properly

It is pertinent to note that [the incoming auditor] is not authorized to conduct any audit on behalf of [the respondent's firm]⁸

It is the privilege of your governing body to appoint auditors and hence I hereby request you to please arrange to issue a letter of appointment for the financial year 2018-19 at your earliest possible

He also pressed his thirty-six-year record and claimed his firm was the only one empanelled for the work.⁹ The complaint ran for close to seven years before it was decided.¹⁰

What the respondent said#

Three arguments, and they are the three anyone in his position would reach for.

That the removal itself was irregular under the state societies legislation, and he was entitled to ask about it. That "experience" referred to the complexity of the accounts, not to the other man's competence. And that the letters went only to existing clients, privately and one-to-one — not circulars, not advertisements, therefore not solicitation.

He also challenged the prima facie opinion as a breach of natural justice, cited a long unblemished record, and said he regretted any part of the letter that had been misread.

What the Board held#

He admitted writing the letters and did not dispute a word of their contents. That left only the question of what the letters were.

The Board found the language went beyond protest or clarification: the letters were "clearly intended to influence the client authorities to reconsider or reverse the appointment of the Complainant and to secure the audit work for the Respondent" (para 20). That is solicitation.

Separately, unsubstantiated remarks about a fellow member's competence and authorisation — a member who had trained at his own firm — failed the courtesy the profession expects, and brought it into disrepute (para 21).

Two lines dispose of the defences most likely to be tried again:

personal circumstances, past association, or emotional considerations cannot justify conduct that is otherwise inconsistent with the standards of professional ethics expected from a Chartered Accountant

the issue before it is not the legality of appointment, but the propriety of the Respondent's conduct and the manner in which he chose to address the situation

On the second, the Board added that he had never gone to court about the appointment — so his remedy plainly "did not lie in issuing letters containing solicitous and disparaging statements" (para 22).

There is a quieter point at para 19. He had alleged the incoming auditor improperly approached the client, then said he did not wish to prove it and produced nothing for it. An allegation raised and dropped is worth less than one never made.

The order#

the Board decided to REPRIMAND him.

A reprimand is the lightest punishment the Board can impose.¹¹ No suspension, no fine. Punishment was heard separately from guilt, before a differently constituted Board.¹²

Why it matters#

This section is ours, not the Board's.

The incoming auditor's letter has one correct reply, and it goes to him. If you object to the appointment, object to the auditor. The moment your reply is addressed to the client, its purpose stops being clarification — and the Board reads purpose off the contents, not off your description of them.

"Only my existing clients" is not a defence to solicitation. It was argued here and it failed. Item (6) does not turn on whether the reader was a stranger. It turns on whether you asked for the work — and this letter closed by requesting an appointment letter for the year.

Disparaging the other member is a second charge, not part of the first. The competence and "not authorized" remarks attracted their own clause in their own Part. One letter that both asks for work and belittles the person holding it ordinarily produces two findings.

Seven years, for a letter. The reprimand is mild; the process was not. That gap is the real cost of the conduct, and it never appears in the operative paragraph.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.

Footnotes#

1. The complainant served articleship at the respondent's firm from 1 April 2011 to 31 March 2014 (para 1). The Board returned to this at para 21 — the remarks were made about a member who had trained there. ↩

2. Item (8) of Part I of the First Schedule requires an incoming auditor to communicate with the retiring auditor before accepting a position previously held by another chartered accountant. The obligation is the incoming auditor's; it was discharged here, and the misconduct found was in the response to it. ↩

3. CA. Rohan Agrawal (M.No. 439726), M/s Rohan N.K Gupta & Co. v. CA. Shriyans Kumar Jain (M.No. 071151), M/s N.K Gupta & Company — both of Gwalior. ↩

4. First Schedule matters go to the Board of Discipline; Second Schedule matters, and matters falling under both, go to the Disciplinary Committee. The two carry very different punishment ceilings. ↩

5. Item (6) of Part I of the First Schedule concerns a member in practice soliciting professional work, whether directly or indirectly, by circular, advertisement, personal communication or interview. Read the clause text alongside the order — the finding turns on its wording, and the order does not reproduce it. ↩

6. Part IV of the First Schedule deals with "other misconduct". Item (2) covers conduct which, in the opinion of the Council or its Boards, brings disrepute to the profession — which is why it can attach to behaviour that is not professional work as such. ↩

7. The respondent's firm had audited Madhav College, PGV College and other institutions run by Madhya Bharat Shiksha Samiti. For 2018-19 the complainant was appointed statutory auditor of Madhya Bharat Educational Society and the institutions it manages. The letters went to the principals of Madhav Shiksha Mahavidyalaya, Madhav Law College and PGV College. The order records the letter as "dated nil" — undated. ↩

8. The passage names both men. Squared brackets are ours; the order's own words are "Mr. Rohan Agrawal" and "N.K Gupta & Co" respectively. Nothing else in any quotation on this page has been altered. ↩

9. The two further passages put in issue: "we are doing your audit since last 36 years and we are appointed by your governing body every year", and "our firm is only empanelled firm with Registrar of Firms & Societies for conducting Audit of Madhya Bharat Education Society". The complaint noted the tension between the two — appointment by the governing body, or appointment by empanelment. ↩

10. Complaint filed 2019. Prima facie opinion of the Director (Discipline), 29 September 2021. Heard 21 July 2023 (part heard), 6 December 2023 (adjourned at the respondent's request), 28 October 2025 (part heard) and 8 December 2025 (concluded). ↩

11. Section 21A(3) gives the Board a graduated set of punishments, of which a reprimand is the lowest, ahead of removal of the name from the Register for a limited period and a fine. Check the current sub-section before relying on any figure — the amounts have been amended. ↩

12. The findings were signed by CA. Rajendra Kumar P (Presiding Officer) and Ms. Dolly Chakrabarty (Government Nominee). Punishment, under Section 21A(3) read with Rule 15(1), was passed by a Board of CA. Babu Abraham Kallivayalil (Presiding Officer), Ms. Dolly Chakrabarty and CA. Pankaj Shah, after hearing the respondent by video conference. ↩