--- title: An incoming auditor's proof of communication was addressed to a partner who had died before the certificate arrived. description: An incoming auditor claimed prior communication by email. The addressee had died before any confirming certificate surfaced, and the Board fined the auditor for the missing communication. case_number: BOD 793/2025 file_number: PR/327/2021/DD/336/2021/BOD/793/2025 forum: board-of-discipline institute: icai decided_on: 2025-12-08 punished_on: 2025-12-30 outcome: Fine clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/01/34.-BOD-793-2025.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 793 2025, item 8 part i first schedule, communication with previous auditor, no objection certificate statutory audit, incoming auditor prior communication, board of discipline fine source: /icai/board-of-discipline/bod-793-2025 --- # An incoming auditor's proof of communication was addressed to a partner who had died before the certificate arrived. Two chartered accountancy firms had jointly audited a leasing and finance company for two years, and their fees for that work were still unpaid when a new firm took over the statutory audit.[^parties] The outgoing firm complained that nobody had told it the change was coming. ## What happened ```timeline A leasing and finance company engages two chartered accountancy firms as its joint statutory auditors for two years running. Payment of their professional fees falls into dispute, and the relationship with the company sours. While that dispute is still open, the company appoints a different firm as its statutory auditor for the following year. According to the outgoing auditors, no communication ever reached them about the change before it happened. Years later, once a complaint is filed, the incoming firm produces an email it says was sent to the outgoing auditors before the appointment, and later still, a signed no-objection certificate from one of their partners. The complainant disputes both documents. The partner the email was supposedly addressed to had died months earlier, so nobody can verify he ever received it; the partner who did sign the certificate says afterwards that he did so on the incoming firm's word alone, not because any real communication had reached him. The Board examines the paperwork, finds the certificate came into existence only after the appointment rather than before it, and holds that no genuine prior communication was ever made. It fines the incoming auditor. ``` The dates carry the case. The email said to have gone to the outgoing auditors is dated 9th December 2015 — the same month the new appointment was made. The certificate said to confirm it is dated 1st December 2021, nearly six years on, and it names a partner who was not the one the email was addressed to (para 11). The partner the email had gone to, the outgoing firm told the Board, had died on 15th April 2021 — before that certificate was ever signed. A parallel dispute ran alongside the communication charge: an unpaid fee the outgoing auditors put at over Rs 3 lakh. The incoming auditor said the true fee was only Rs 15,000, already settled, and offered Rs 25,000 without admitting liability, purely to close the matter. That charge never reached a finding — the Director (Discipline) dropped it at the screening stage, leaving only the communication charge before the Board (para 10). ## 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 a position as auditor that another member already holds.[^item8] The duty is to write; it says nothing about whether the outgoing auditor consents, and a no-objection certificate is only the customary way the duty gets proved, not the duty itself.[^noc] The Board found that no such writing had ever reached the outgoing auditors before the new appointment, and held the incoming auditor guilty under Item (8). ## What the respondent said The account was that communication had, in fact, been made: an email dated 9th December 2015, addressed to the outgoing auditors before the appointment was accepted, followed years later by a personal confirmation and a no-objection certificate from one of their partners. Copies of both were placed before the Board. Beyond the paperwork, the defence pointed to circumstance. The audit was taken up under pressing conditions, with the outgoing auditors said to have been slow to act and the company exposed to possible action from the Reserve Bank of India as a result. No personal financial benefit had come from accepting the assignment, and the complaint, on this account, was driven by the unresolved fee dispute rather than any genuine professional grievance (para 6). ## What the Board held The Board went first to the authenticity of the documents, and found reasons to doubt both. The partner to whom the email was said to have been addressed had died on 15th April 2021, which made it impossible to verify that any such email had ever reached him. There were discrepancies in dates, no verifiable metadata behind the email, and conflicting statements from the two outgoing partners about how the certificate had come about at all (para 11). On the certificate itself, the Board found it had followed the appointment rather than preceded it: > the Respondent's No Objection Certificate (NOC) appears to have been obtained after or > contemporaneous with his appointment as auditor, rather than prior to it, thereby > contravening the ethical requirement of obtaining prior written communication and consent > before accepting an audit assignment (para 12) The same paragraph noted that certain audit reports for the intervening years appeared to have been backdated, with statutory filings made only much later — a detail the Board treated as further evidence of the lack of professional diligence behind the assignment, though it formed no separate charge. On that record, the Board concluded: > the Respondent, by accepting the statutory audit assignment without proper prior > communication with the outgoing auditors, has violated the provisions of Item (8) of Part-I > of the First Schedule (para 14) ## The order > the Board hereby resolves to impose a Fine of Rs. 25,000/- (Rupees Twenty-Five Thousand > only) upon [the Respondent].[^order-bracket] A fine sits below removal from the Register on the Board's punishment scale, and above a bare reprimand.[^fine] The figure matches, almost exactly, the goodwill payment the respondent had already offered over the separate fee dispute — though the order does not say the Board had that offer in mind when it set the amount.[^coram] ## Why it matters *This section is ours, not the Board's.* **A no-objection certificate obtained years after the appointment proves nothing about what happened before it.** This one arrived nearly six years later, addressed to a partner other than the one the original email had gone to. Get your communication, and proof of it, in place before you accept the assignment — not once a complaint forces the question. **Address your communication to someone who can still confirm it.** The partner named in the email had died before anyone could verify he had received it, and that alone was enough to cast doubt on the whole account. Send correspondence to a firm, not to one individual whose memory of it you will one day need. **An unresolved fee dispute with the outgoing auditor is exactly the kind of grievance that turns into a communication complaint.** Settle or clearly document fee disagreements separately, rather than leaving them to surface years later as the backdrop to an ethics charge. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Manoj Harivadan Lekinwala*, Gandhinagar, was the complainant, one of the two joint outgoing statutory auditors of *M/s Gandhinagar Leasing and Finance Ltd.* (the other being M/s G J K & Associates). *CA. Amit Kumar Jitendrabhai Joshi (M. No. 120022)* of *M/s J. Singh & Associates*, Ahmedabad, was the respondent, the incoming statutory auditor. [^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. The audit in question was the company's statutory audit for the financial year 2015-16. [^noc]: A no-objection certificate is the outgoing auditor's written confirmation that they have no objection to the incoming auditor taking the assignment. It is the customary proof that the communication duty under Item (8) was met, but the clause obliges the incoming auditor to write — it does not require the outgoing auditor to issue anything, and a certificate obtained after the fact does not stand in for communication made before it. [^order-bracket]: The order's operative line names the respondent in full; the quotation above substitutes "[the Respondent]" for that name. Nothing else in the quoted text was altered. [^fine]: Section 21A(3) gives the Board a graduated set of punishments — a reprimand, a fine, or removal of the member's name from the Register for a period it fixes. Check the current sub-section before relying on any figure; the amounts have been amended over time. [^coram]: CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member) signed both the findings and the punishment order.