02 August 2011
Kindly suggest/guide for giving and taking NOC before accepting any Audit. When the previous Auditor has resigned on account of amount due to an Auditor in 2008 and after finding that even after 2 years the management has not settled. On what conditions should the new auditor accept the Audit on receiving the NOC subjet to above information.
02 August 2011
Q. Whether a Chartered Accountant in practice can accept audit in case the audit fee of the previous auditor remains unpaid?
A. No, in case the undisputed audit fees for carrying out the statutory audit under the Companies Act, 1956 or various other statutes have not been paid, the incoming auditor should not accept the appointment unless such fees are paid. In respect of other dues, the incoming auditor should in appropriate circumstances use his influence in favour of his predecessor to have the dispute as regards the fees settled. The Council has taken the view that the provisions of audit fee made in accounts signed by both the auditor and the auditee shall be considered as 'undisputed' audit fees. In this connection, attention of members is invited to the Council General Guidelines, 2008 dated 08.08.2008 also published at pages 686 of October 2008 issue of the CA Journal. Under this notification, a member in practice shall be deemed to be guilty of professional misconduct, if he accepts the appointment as an auditor of an entity in case the undisputed audit fee of another Chartered Accountant for carrying out the Statutory audit under the Companies Act, 1956 or various other statues has not been paid.
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