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2019 (8) TMI 117 - HC - Indian LawsProfessional misconduct against CA - conducting both internal audit as well as statutory audit - accepting the assignment without communicating with the previous auditor - Clauses 7 and 9 of Part I of the Second Schedule to ICAI Act - ICAI found some merit in allegation and awarded punishment of being reprimanded - Writ petitioner being aggrieved person was the trustee of the trust and was expelled - HELD THAT:- This Court is of the view that there is no flaw in the conclusion of the Disciplinary Committee in rejecting the said allegation. The Disciplinary Committee had noticed that the resolution dated 03.03.2003 was passed at a meeting which was attended by only four trustees. It had noticed that this number was short of the 3/4th majority required as per Rules and Regulations. Mr Jayant Mehta did not produce any material to show that this decision was perverse or unreasonable. Undeniably, a statutory auditor of an entity cannot be its internal auditor. The rationale being that he cannot be called upon to give an independent and objective opinion on the accounts if he has not been a part of the internal audit system. There was no material in the present case to substantiate that respondent no.3 had given any report or was placed in a position where he was called upon to comment on his own work. Respondent no. 3 was simply appointed as an auditor to audit the accounts of the Trust although, the same was termed as a statutory auditor. Mr Mehta was pointedly asked whether there was any material to indicate the scope of audit to be performed by respondent no.3. However, he was unable to show any document to indicate the same. This Court is unable to accept that the decision of the Disciplinary Committee of ICAI is erroneous or warrants any interference by this Court - present petition is dismissed with costs quantified at ₹25,000/- to be deposited with Delhi High Court Legal Services Committee within a period of two weeks from today.
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