--- title: An incoming statutory auditor admitted never writing to the outgoing auditor. Only the fine remained to decide. description: A chartered accountant took over a client's statutory audit without ever writing to the outgoing auditor, admitted it in his own written statement, and was fined Rs.25,000. case_number: BOD 795/2025 file_number: PR/316/2022/DD/245/2022/BOD/795/2025 forum: board-of-discipline institute: icai decided_on: 2025-07-29 punished_on: 2025-12-12 outcome: Fine clauses: Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/01/18.BOD-795-2025.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 795 2025, item 8 part i first schedule, communication with previous auditor, no objection certificate statutory audit, statutory auditor change, board of discipline fine source: /icai/board-of-discipline/bod-795-2025 --- # An incoming statutory auditor admitted never writing to the outgoing auditor. Only the fine remained to decide. A chartered accountant's firm had audited a fuel-trading company in Ahmedabad for a year. The following year, another member took over the statutory audit without ever writing to tell him so.[^parties] ## What happened ```timeline A chartered accountant's firm serves as tax auditor and statutory auditor of a fuel-trading LLP for one financial year. The following financial year, another chartered accountant accepts the position of statutory auditor of the same company. He takes on the assignment without first communicating in writing with the outgoing auditor, and without a no-objection certificate from him. The outgoing auditor complains to ICAI. In his written statement, the incoming auditor admits the charge outright, and repeats the admission when the matter is heard. The Board finds him guilty on his own admission. Months later, given a chance to be heard on the punishment, he asks for a sympathetic view and promises not to repeat it. The Board fines him. ``` Nothing in this case turned on a document that was missing or disputed — the admission itself did the deciding. In his written statement dated 14th June 2022, the respondent "unequivocally admitted to the charge levelled against him", and reaffirmed it at the hearing (para 4). The complainant separately confirmed there were no fees outstanding between the two firms (para 4) — a detail that had no bearing on the charge, which was never about money. ## 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 previously held by another member.[^item8] A no-objection certificate is the usual way this is evidenced in practice, but the duty is to write, not to obtain one.[^noc] The respondent conceded he had done neither, and the Board found him guilty on that admission alone. ## What the respondent said He did not contest the charge at any stage. His written statement admitted it outright, and at the hearing he reaffirmed and reiterated that admission (para 4). Given the chance to speak to the punishment, he asked the Board to take a sympathetic view and promised not to repeat the lapse. ## What the Board held With an unqualified admission on record, the Board saw nothing left to try: > the Board is of the considered view that the Respondent has voluntarily and explicitly accepted > his mistake. Considering this clear admission, and after reviewing the entire material on record, > the Board unanimously holds that no further inquiry is necessary regarding the factual matrix or > the veracity of the allegation (para 5) It recorded the finding in the same terms as the charge: > the Respondent is 'Guilty' of Professional Misconduct falling within the meaning of Item (8) of > Part-I of the First Schedule to the Chartered Accountants Act, 1949 (para 6) ## The order > the Board decided to impose a Fine of Rs.25,000/- (Rs. Twenty-Five Thousand only) upon him. A fine sits in the middle of the Board's punishment scale, between a reprimand and removal from the Register.[^scale] The same three-member Board that recorded the finding in July 2025 heard the respondent on the punishment five months later, in December, after he appeared through video conferencing.[^coram] ## Why it matters *This section is ours, not the Board's.* **An unqualified admission ends the inquiry, not the case.** Once the written statement conceded the whole charge, the Board held that no further examination of the facts was needed. Contest a charge early and fully, or not at all — a partial denial invites more scrutiny than a clean admission does. **Confirming there are no unpaid fees does not answer a communication charge.** The complainant told the Board nothing was owed between the firms, and it made no difference to the finding. Item (8) asks whether you wrote the letter, not whether money changed hands. **A plea for leniency belongs at the punishment stage, not before.** The respondent never disputed guilt; he asked the Board to go easy once guilt was already decided. Keep the two stages separate in your own mind, and use each for what it is for. **Write to the outgoing auditor before you accept, not after you are asked to explain why you didn't.** The letter costs nothing and this entire proceeding turned on its absence. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Parmar Haresh Kumar Jivanlal (M. No. 046976)*, a partner of *M/s. HJP & Co. (FRN 113456W), Ahmedabad*, was the complainant — the outgoing statutory auditor. *CA. Ketan Ganpatbhai Barevadia (M. No. 120258), Ahmedabad* was the respondent, the incoming auditor. The audit concerned M/s. Jas Fuels LLP, whose statutory audit for FY 2020-21 changed hands from the complainant's firm, which had held it for FY 2019-20. [^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. [^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 ordinary way the communication duty is evidenced in practice, but the clause itself requires only that the incoming auditor write — no certificate is mentioned in the order as having been sought or given here. [^scale]: 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 limited period. Check the current sub-section before relying on any figure — the amounts have been amended over time. [^coram]: The findings, dated 29th July 2025, were signed by CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member). The same three sat for the punishment order, passed on 12th December 2025 after a communication dated 2nd December 2025 gave the respondent an opportunity to be heard.