--- title: An incoming auditor was accused of taking two audits without writing first. A 2018 email showed the letter had gone. description: An incoming auditor took over a client's VAT and tax audits. Nobody proved the complainant had ever held the VAT work, an old email settled the tax audit, and both charges failed. case_number: BOD 768/2024 file_number: PR/372/2020/DD/361/2020/BOD/768/2024 forum: board-of-discipline institute: icai decided_on: 2026-07-27 outcome: Not guilty clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/08/6.-BOD-768-2024.pdf published: 2026-08-29 author: Jainam Shah keywords: bod 768 2024, item 8 part i first schedule, communication with the retiring auditor, vat audit, tax audit, right to information, board of discipline not guilty source: /icai/board-of-discipline/bod-768-2024 --- # An incoming auditor was accused of taking two audits without writing first. A 2018 email showed the letter had gone. An incoming auditor took over two of a client's audits, a VAT audit and then a tax audit, from the man who had handled them before him.[^parties] The retiring auditor said neither handover came with the written communication that Item (8) requires.[^auditee] ## What happened ```timeline A chartered accountant audits a client's VAT filings continuously from when the requirement begins, through the year ending March 2016. The relationship runs several years without incident. For the following year, a different chartered accountant's signature appears on the client's VAT audit report. The outgoing auditor does not learn of the change at the time — he obtains that report, and the one after it, years later through a Right to Information application, and forwards copies to the man he believes has taken his place. Around the same time he discovers the client's tax audit moved the same way: he had handled it for one year, and his successor took over the next. He complains to ICAI that neither audit came with the prior communication Item (8) requires. The incoming auditor answers with two different defences. On the VAT audit, he denies the signature is even his and says it was forged. On the tax audit, he says he wrote to the outgoing auditor by email before accepting the work, and that he can produce it. At the final hearing, years into the proceedings, he produces that email again to prove it was actually sent. The Board finds no evidence he ever held the VAT assignment he denies, accepts the email as adequate communication for the tax audit, and closes the case with both charges unproven. ``` Two details, absent from the timeline, decided the case. On the VAT audit, the outgoing auditor never produced an appointment letter or engagement letter of his own — nothing beyond the disputed signature to show he had ever held the assignment Item (8) was supposed to protect (para 16). On the tax audit, the outgoing auditor admitted, when pressed, that the email address the 2018 message had gone to was his own — he denied reading it, but not that it was his (para 15). ## The clause **Item (8) of Part I** of the First Schedule requires a chartered accountant to communicate with the retiring auditor, in writing, before accepting an audit that member already holds.[^item8] It is not a rule about audit quality, and it does not need the retiring auditor's consent — only that the incoming auditor writes. The complaint raised the clause twice against the same two men: once over the VAT audit taken over for 2016-17, and once over the tax audit taken over for 2017-18. The Board found the charge not established on either occasion, and closed the case. ## What the respondent said Practising for more than twenty-six years with, he said, an unblemished record, the respondent denied the charge outright and attacked the opinion that had let the complaint through screening as both factually and procedurally flawed. He raised a threshold objection first. The complaint had been filed in the complainant's individual capacity, though the complainant claimed to represent a firm — and no resolution or authorisation from that firm was on record, as the disciplinary rules require. On that ground alone, he argued, the complaint should not have proceeded (para 8). On the substance, he gave two different answers for two different years. For the VAT audit, "the signature appearing on the audit report was not his genuine signature" (para 10) — he had neither signed nor conducted it, and had written to the client and the tax department once he learned his name was on it. For the tax audit, he said he had done exactly what Item (8) asks: an email to the complainant on 23 October 2018, two days before he accepted the 2017-18 engagement (para 11). He also argued that nothing on record proved either charge: "there is no conclusive evidence demonstrating that the Complainant was the previous auditor whose consent or communication was required, nor has any loss, prejudice or professional harm been shown to have resulted from his actions" (para 12). The client, he said, had simply moved on, dissatisfied with the complainant's work, and the complaint itself was "a misuse of the disciplinary process ... filed with the sole intention of harassing him and damaging his professional reputation" (para 13). ## What the Board held The Board treated the two audits separately, because the evidence on each pointed a different way. On the tax audit, there was little left to resolve. The respondent had produced an email dated 23 October 2018, addressed to an email address the complainant admitted was his own; the complainant denied receiving it, but not that it was his address. Directed to prove transmission, the respondent went further and, at the final hearing itself, forwarded the office a copy of the same 2018 email. That was enough: "the Board is not inclined to accept that there was any deliberate failure on the part of the Respondent to communicate with the previous auditor before accepting the said assignment" (para 15). Producing the email again, so late in the proceedings, only reinforced that: "the subsequent production of the email lent support to the Respondent's contention that reasonable efforts had been made to communicate with the previous auditor in accordance with the prescribed professional requirements" (para 20). On the VAT audit, the Board never had to decide whether the signature was forged. It found the complainant had not proved the respondent held the assignment at all — no independent evidence beyond the disputed report, and no appointment or engagement letter showing the complainant was even the auditor whose communication Item (8) was meant to protect (para 16). Despite the opportunity, no corroborative evidence was produced either by the complainant or by the client (para 17). The Board also noted, as context rather than proof, that no professional fees were outstanding between the two men (para 18). One line covers both findings: "it is a settled principle that findings of professional misconduct must be based on cogent and reliable evidence" (para 17). On the record before it, "the evidence available on record is insufficient to establish that the Respondent accepted the audit assignments in contravention of Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949" (para 19), and "the benefit of doubt, therefore, must necessarily accrue to the Respondent" (para 19). ## The order > the Respondent is 'Not Guilty' of Professional Misconduct falling within the meaning of Item (8) > of Part I of First Schedule (para 22) > Ordered accordingly. The case stands disposed of. (para 23) A not-guilty finding closes the file outright.[^closure] There is no punishment hearing to follow and no differently constituted Board to reconvene — the order that decides guilt is the order that ends the case.[^coram] ## Why it matters *This section is ours, not the Board's.* **Produce the document, not a description of it.** The tax audit charge turned on a single email from 2018, still on file at a hearing six years later. Keep acceptance correspondence long after the assignment ends. **Whoever says you displaced them has to prove they held the work.** The outgoing auditor could produce no engagement or appointment letter for the VAT audit — only a signature obtained years later through a Right to Information request, and disputed by the man it was attributed to. Keep your own appointment letter if you might ever need to complain. **An email to an address the recipient admits is his is enough.** He conceded the address was his and only denied reading the message. Send to a verified address, keep the sent copy, and do not worry about proving it was opened. **Unpaid fees are context, not a precondition.** Non-payment is not needed to bring an Item (8) complaint, and a clean fee position will not decide one. Do not wait on a fee dispute before writing to a retiring auditor. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Manoj Agrawal (M.No. 076918), Prayagraj* was the complainant, the outgoing auditor who had audited the client's returns for years. *CA. Vipul Varshni (M.No. 077931), Prayagraj* was the respondent, the incoming auditor. The complaint was filed by the complainant in his individual capacity; his maintainability objection noted the complainant had described himself elsewhere as representing a firm, *M/s Ramesh C. Agrawal & Co.*, without producing that firm's authorisation on record (para 8). [^item8]: Item (8) of Part I of the First Schedule requires a member accepting an audit previously held by another chartered accountant to communicate with the outgoing auditor in writing before accepting the appointment. The obligation belongs to the incoming auditor — the member accused here. [^auditee]: The client was a proprietorship, M/s Jai Durga Spring House. The VAT audit reports the complainant relied on are dated 20 November 2017 and 31 October 2018; he said both carried the respondent's signature and forwarded copies to him under a covering letter dated 25 July 2020 (para 2). [^closure]: Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 lets the Board close a case once it finds the charge not proved. A finding of guilt instead proceeds under Rule 15(1), with punishment considered separately. [^coram]: CA. Babu Abraham Kallivayalil (Presiding Officer), Dolly Chakrabarty, IAAS (Retd.) (Government Nominee) and CA. Pankaj Shah (Member) — all in person. The final hearing was held at ICAI Bhawan, New Delhi on 20 May 2026, with the respondent appearing in person and the complainant by video conference; judgment was pronounced on 27 July 2026.