--- title: An auditor backdated a resignation letter by more than a year. The Board found no evidence it was ever sent. description: An auditor claimed to have resigned in December 2020 but sent no letter until nearly a year later. The Board found the date was never communicated and removed him for a fortnight. case_number: BOD 700/2023 file_number: PR/191/2022/DD/213/2022/BOD/700/2023 forum: board-of-discipline institute: icai decided_on: 2024-08-27 punished_on: 2024-09-25 outcome: Removal clauses: Item (2) of Part IV of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2024/10/27.-BOD-700-2023.pdf published: 2026-09-09 author: Jainam Shah keywords: bod 700 2023, other misconduct, item 2 part iv first schedule, backdated resignation letter, statutory auditor resignation, form adt-3, no objection certificate, board of discipline removal source: /icai/board-of-discipline/bod-700-2023 --- # An auditor backdated a resignation letter by more than a year. The Board found no evidence it was ever sent. A chartered accountant served for years as the statutory auditor of a small Chennai company, and told it, informally, that he wanted to leave.[^parties] By the time his resignation actually reached the company, the paperwork already said he had gone a year earlier. ## What happened ```timeline A chartered accountant serves for several years as the statutory auditor of a small private company. The company has no accounts staff of its own; a representative it has authorised handles its filings and its correspondence with the tax department and the registrar. Over the following year the auditor tells the company, informally and by email, that he wants to hand the audit over to someone else. Nothing is put in writing. The engagement carries on: he keeps asking for financial statements, and the company keeps not sending them. The company brings in a new auditor. Before starting, the new auditor asks the outgoing auditor for the no-objection certificate the rules require, and is refused. Only months later does a resignation finally reach the company by email, followed by a filing with the government that records the resignation as having taken effect more than a year before that. The company complains to the Institute that the resignation was backdated, that it was left unable to appoint a new auditor in time, and that the delay cost it a tax filing deadline and the right to carry forward its losses. A separate allegation, that the auditor had let an outsider handle his correspondence, is screened out before the hearing begins. Across four hearings spanning about a year, the Board hears the company's representative and the incoming auditor as witnesses, examines the backdated letter and the auditor's own emails, and finds the resignation was never communicated when it was supposed to have been. Months later, on a separate day set aside to hear the auditor on punishment, it removes him from the Register for a short period. ``` Two documents decided the case, and a third undid the auditor's own account of it. The first was the letter he produced to prove the earlier date: a resignation addressed to the company's board, dated 2nd December 2020. It carried no acknowledgment that anyone had received it and no record of how, or whether, it had ever been sent — the Board called it "just a resignation typed on the letter head of the Respondent with no evidence of being communicated/sent to the Complainant or the Company" (para 15). The second was the email that actually reached the company, more than a year later. Its own file metadata showed it had been created the day it was sent. The Board called it "the standing proof that the Respondent has not resigned on 2nd December 2020" (para 16). In between, the auditor's own words worked against him. In March 2021 he wrote that the company could, "if you desire," change over to another auditor; in June 2021 he was still asking for its financials and bank statements — not the conduct of someone who believed he had already left (para 16). And when the company's incoming auditor asked for the no-objection certificate the rules require, none came. The Board asked, "if Respondent has resigned from the post of auditor, then what would stop him from issuing NOC?" and found he had not resigned at all by that point (para 17). ## The charge Only one clause was ever in play. - **Item (2) of Part IV of the First Schedule** — "Other Misconduct." It carries no fixed list of prohibited acts; it catches conduct that discredits the profession once none of the more specific items apply.[^item2] A second charge — that the auditor had let an outsider correspond with the company on his behalf — was screened out before the hearing began, when the Director (Discipline) found no case to answer on it.[^screening] Even within the surviving charge, the Board went no further than the backdating itself: the company's claim that the delay cost it a tax filing deadline and its carried-forward losses was never proved, because the company brought no evidence for it (para 19). ## What the respondent said The auditor's defence rested on three points. He argued the timing cut the other way: if the company genuinely believed he was still its auditor, nothing stopped it sending nine months of financial statements for the year in question, and it never did. The company had already been through earlier rounds of registrar and tax deadlines and knew what was at stake; keeping its accounts pending and then blaming him for it, he said, showed the complaint was vindictive (paras 5–6). On the letter itself, he said it was never predated — it simply recorded a decision he had already communicated orally, and the company's own representative had confirmed by email that his intention to leave was known months before the letter's date. Filing Form ADT-3 with the registrar was his own duty as the outgoing auditor; telling the company about it was for information, not something needing the company's approval (paras 7, 9). On the certificate, he said he had already lined up a successor by late November 2021 and handed over the client's financials for further work — and when the new auditor rang him for the no-objection certificate, he gave it verbally, then and there. The tax filing deadline for that year had also been extended by the tax department, he added, leaving more than enough time to file a straightforward return, so no loss could fairly be laid at his door (paras 8, 10). ## What the Board held The Board took the letter apart first. A resignation typed on the auditor's own letterhead, with no acknowledgment of receipt and no account of how it reached anyone, was not communication — and the auditor never explained why, if he had already resigned in December 2020, he waited a full year to file the ADT-3 recording it (para 15). His own emails then closed the gap the letter had opened. The one in March 2021 still asked the company to consider changing auditors; the one in June 2021 still asked for its financials and bank statements. Neither reads as the words of someone who had already left. The email that finally carried his resignation, sent in December 2021, was created the same day it was sent, which the Board treated as proof that nothing earlier had existed (para 16). The incoming auditor's evidence pointed the same way from the other side: he had asked the outgoing auditor for a no-objection certificate and been refused. The Board found the auditor was still in post at the time, and that the refusal had kept the new appointment from going through (para 17). A witness called for the company fared worse. He testified that the auditor had resigned in January 2021, a date that could not be squared with his own account of emails and fee demands running months past it, and the Board found him unreliable (para 18). It also noted that a small fee remained outstanding to the auditor, which the company accepted, and that the company had brought no evidence at all for the losses and penalties it said the delay had caused (para 19). Weighing all of it, the Board held: > Thus, in conclusion, in the considered opinion of the Board, the Respondent is 'Guilty' of > Other Misconduct falling within the meaning of Item (2) of Part-IV of the First Schedule to the > Chartered Accountants Act, 1949. (para 21) ## The order > Thus, upon consideration of the facts of the case, oral as well as written submissions, and the > consequent misconduct of [the Respondent], the Board decided to remove the name of [the > Respondent] for a period of 15 days from the Register of Members. (para 3)[^bracket] Removal from the Register is the most severe sanction on the Board's scale — heavier than a reprimand or a fine.[^removal] No fine accompanied it. The Findings were signed at the end of August 2024; the punishment followed about a month later, once the auditor had been given the chance to be heard in person on the sanction.[^coram] ## Why it matters *This section is ours, not the Board's.* **A resignation is only as good as its proof of delivery.** The auditor's letter carried a date, a letterhead, and nothing else — no acknowledgment, no record of how it was sent. Keep evidence that a resignation reached the client, not just a copy of the letter itself. **Acting like the auditor after you say you've resigned undoes the resignation.** Emails asking for financials and bank statements months after the claimed date were read as proof the auditor had not actually left. Once you have told a client you are stepping down, stop doing the work. **A no-objection certificate should be given, or refused, in writing.** A verbal "no objection" left no record and did not survive the incoming auditor's contrary testimony. Put it on paper the day you are asked. **Form ADT-3 records your account of events, not the Institute's.** Filing it a year after the date it names, with no paper trail in between, was read as evidence against the date rather than for it. File promptly, and file consistently with what you can prove. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: The complainant, Shri Varadharajan S, a director of M/s. Coologeex Technology Solutions Pvt. Ltd. of Chennai, was not a chartered accountant. The respondent was *CA. K M Ramakrishnan (M. No. 026737)* of *M/s. K M Ramakrishnan & Co.*, Chennai. [^item2]: Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 covers "Other Misconduct" — conduct that discredits the profession but is not captured by the more specific items listed elsewhere in the Schedule. [^screening]: The complaint as originally filed also alleged that the auditor had authorised a person who was not a member of ICAI to correspond with the company on his behalf. The Director (Discipline)'s Prima Facie Opinion found the auditor not guilty of this charge, and the Board's hearing proceeded only on the backdated-resignation charge. [^bracket]: The order's operative paragraph names the respondent directly, twice, before the punishment: "the consequent misconduct of CA. K M Ramakrishnan (M. No. 026737), the Board decided to remove the name of the CA. K M Ramakrishnan (M. No. 026737)". This page substitutes "[the Respondent]" for the name in both places; nothing else in the quotation is altered. [^removal]: Section 21A(3) gives the Board of Discipline a graduated set of punishments — a reprimand, a fine, and removal of the member's name from the Register for a period of up to three months — of which removal is the most severe. Check the current sub-section before relying on any figure; the amounts and periods have been amended over time. [^coram]: The Findings, dated 27th August 2024, were signed by CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member), sitting in person. The punishment order, passed on 25th September 2024 after the auditor appeared by video conferencing, was signed by a two-member Board of the same Presiding Officer and Government Nominee, without CA. Priti Savla. Four hearings were held on the merits, in June and December 2023 and January and June 2024, the first three adjourned for part-hearing or non-appearance.