--- title: A company director's complaint against an incoming auditor was dismissed as unauthorised, without reaching its merits. description: A company director complained that an incoming auditor never wrote to the outgoing one. The Board found the complaint unauthorised and dismissed it without examining the auditor's conduct. case_number: BOD 769/2024 file_number: PR/452/2022/DD/449/2022/BOD/769/2024 forum: board-of-discipline institute: icai decided_on: 2025-12-08 outcome: Not guilty clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2025/12/16.-BOD-769-2024.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 769 2024, item 8 part i first schedule, void ab initio complaint, board resolution authorisation, communication with previous auditor, board of discipline not guilty source: /icai/board-of-discipline/bod-769-2024 --- # A company director's complaint against an incoming auditor was dismissed as unauthorised, without reaching its merits. A company's director complained to ICAI that the accountant who took over its statutory audit had never given proper written notice to the firm being replaced.[^parties] Before the Board could weigh that claim at all, it had to ask whether the director had ever been authorised by the company to bring the complaint in the first place. ## What happened ```timeline A private company appoints a chartered accountant as its statutory auditor for three financial years, replacing the firm that had audited it before. The company's director later complains to ICAI that the incoming auditor never communicated with the outgoing firm in writing before taking the assignment, and separately accuses him of pressuring the company to fetch a no-objection certificate on his behalf and of withholding records after the relationship soured. The incoming auditor answers that the outgoing firm had no real objection to his appointment, that the company owed money to an associated consultancy, and that asking the company to collect the no-objection certificate was ordinary professional courtesy rather than pressure. He says he later received a written no-objection from the outgoing firm and a termination letter from the company itself, and that a dispute over his own unpaid fees followed. The complaint is filed with the Institute, and only afterwards does the company produce what it calls a board resolution authorising the director to bring it. The Board examines the timing of that resolution against the timing of the complaint itself, and finds the sequence runs backwards: the resolution is dated to a meeting held after the complaint was already on file in its final form. Concluding that no genuine authorisation ever existed, the Board treats the complaint as never having properly come into being, and closes it without going into what the incoming auditor did or did not communicate. ``` One date undid the company's case. It filed its disciplinary complaint on 27th May 2022, and the Institute received it on 2nd June 2022; a rectified Form-I followed on 1st July 2022. Only then did the company produce a paper purporting to be a resolution of its Board of Directors — authorising the very complaint already on file — passed at a meeting the paper said had been convened on 1st July 2022 (para 8). A resolution cannot authorise a complaint that predates it. ## The charge The complaint alleged the incoming auditor had breached **Item (8) of Part I of the First Schedule**, which requires a chartered accountant to communicate with the retiring auditor in writing before accepting a position that auditor previously held.[^item8] The Board never reached that question. It stopped at the door. ## What the respondent said The incoming auditor's account was that the outgoing firm had no objection to his taking over, that he had asked the company to collect the no-objection certificate rather than pursuing it himself because of an unresolved payment dispute between the company and an associated consultancy, and that this was professional courtesy rather than the threat the company described. He said a written no-objection eventually arrived, dated some weeks after his appointment, obtained through a mutual professional contact. By the time the company terminated the engagement and sought a new auditor, he said, the real dispute was over his own unpaid fee of ₹9,500, and the complaint followed only after he pressed for it. ## What the Board held The Board did not need to resolve any of that. It went instead to the paperwork behind the complaint itself: > the Board observed that it is an afterthought because the complaint in rectified Form-I itself was > filed on 1st July 2022. This fact is a pointer that such a Board Meeting was never held (para 8) Without a resolution genuinely authorising it, the complaint had no standing to have been brought on the company's behalf at all: > the Board finds that no valid Board Resolution, as statutorily required, duly passed and certified > by the Company has been submitted authorising the Complainant to initiate the present Complaint on > behalf of the said Company. In absence of such a valid authorisation, the Complaint lacks > fulfilment of the statutory requirements. Thus, the instant Complaint is deemed to be > void-ab-initio. Consequently, the Board dismissed the Complaint without delving into the merits of > the case and accordingly resolved to close the matter (para 9) This is a different result from a defence that succeeded. Nobody's account of the communication, the no-objection certificate or the fee dispute was tested — the complaint was found never to have properly existed, and everything built on it fell away with it. ## The order > in the considered opinion of the Board, the Respondent is 'Not Guilty' of Professional Misconduct > falling within the meaning of Item (8) of Part I of the First Schedule to the Chartered > Accountants Act, 1949 The Board ordered the complaint closed under Rule 15(2) and disposed of the case in a single hearing.[^rule] The findings were signed by a Board that had heard the matter that same day.[^coram] ## Why it matters *This section is ours, not the Board's.* **A complaint filed on a company's behalf needs a resolution that predates it, not one that follows it.** The Board compared the resolution's own date against the complaint's filing date and found the sequence ran backwards. If a company is bringing the complaint, get the authorisation in writing and minuted before anyone signs the complaint form. **A dismissal at the threshold is not an acquittal on the facts.** Nothing here found that the auditor had, or had not, communicated properly with the outgoing firm — the complaint simply never had the standing to put that question to the Board. Do not read this order as a finding either way on what actually happened. **Keep your own paper trail dated honestly.** A document produced after the event, however genuine its contents, invites exactly the comparison that sank this complaint. Date things when they happen, not when you need them. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *Shri Ashraf Gani, Director, M/s Lo Faro Shop Pvt. Ltd., Mumbai* was the complainant. *CA. Vikash Thakur (M.No. 544359), Partner, M/s VIAN & Associates, New Delhi* was the respondent, appointed statutory auditor of the company for financial years 2020-21 to 2022-23. The outgoing auditor, referred to throughout as the previous auditor and not a party to this case, was *M/s Rakesh Doshi & Associates*. [^item8]: Item (8) of Part I of the First Schedule requires a chartered accountant to communicate with the retiring auditor, in writing, before accepting a position as auditor previously held by another member. [^rule]: Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 — where the Board finds a member not guilty, it records the finding and orders the complaint closed. A complaint found void from the outset is closed the same way, without a separate finding on the underlying allegation. [^coram]: CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee) and CA. Priti Savla (Member). The matter was heard and concluded in a single sitting on 18 August 2025 at ICAI Bhawan, New Delhi, with the complainant appearing by video conference and the respondent in person; findings were signed on 8 December 2025.