ICAI Board of Discipline Holds CAs Guilty of Solicitation and Improper Audit Appointments

The Board of Discipline of the Institute of Chartered Accountants of India (ICAI) has held three Dehradun chartered accountants guilty of professional misconduct for soliciting clients of the firm in which they were partners and for accepting audits without proper communication with the previous auditor. In orders dated 19 June 2026 under Section 21A(3) of the Chartered Accountants Act, 1949, the Board reprimanded each of them. The orders are published in the ICAI Disciplinary Directorate's list of Board of Discipline reports and orders for the council year 2026-27.

The three cases

The complainant in all three matters was CA. Anurag Sangal of M/s Anurag Sangal & Co., Dehradun. The respondents, while partners of that firm, set up M/s Vimal Kishore & Associates LLP, and the complaint alleged that work was diverted to the new firm during 2021-22. The final hearing was held on 25 October 2025, and the Board's findings are dated 31 January 2026. The punishment orders followed on 19 June 2026.

What the Board found

Solicitation, Item (6) of Part I of the First Schedule. The Board held the respondents guilty of soliciting professional work from Uttarakhand Sahakari Chini Sangh Ltd. and its Employees Provident Fund Trust, which were clients of the complainant's firm. The respondents did not produce the complete correspondence that would have shown their communications with these clients were only informational.

Audits without proper prior communication, Item (8) of Part I of the First Schedule. Item (8) bars a member from accepting a position as auditor previously held by another chartered accountant without first communicating with that auditor in writing. The Board held that the respondents accepted audits of Welham Boys' School Society, JJ Buildtech, JJ Realtech Pvt. Ltd., Anand Swaroop Gupta, Gupta Food Products, Mussoorie Public School and Raj Lumba without "proper and independent prior written communication with the previous auditor". The no-objection letters relied on were obtained through partners whose own interests conflicted with the previous firm's, which the Board found defeated the purpose of the requirement.

Charges that failed

The complaint also alleged misappropriation of about ₹55.38 lakh, tampering with the income tax e-filing portal and false representations. The Board did not hold the respondents guilty on these allegations.

Why this matters for practising CAs

The orders apply two long-standing rules to a common situation: partners leaving a firm to set up their own practice. The practical points from the findings are:

• A partner who starts a new firm while still a partner of the old one cannot approach the old firm's clients for work. Keep complete records of any communication with such clients, since the burden of showing that contact was only informational fell on the respondents here.
• Before accepting an audit, write to the previous auditor directly and keep proof of delivery. A no-objection letter signed by a person who is also joining or running the incoming firm may not count as independent communication.
• The Item (8) obligation applies across audit types, including audits of societies, trusts, companies, firms and individuals, as the list of entities in these cases shows.

In each of the three orders the Board decided to reprimand the respondent and imposed no fine. The findings and orders are available in full on the ICAI Disciplinary Directorate website, and members advising clients on a change of auditor can use them as a reference.

Updated on 27 September 2026: Added the three official ICAI Board of Discipline orders dated 19 June 2026 with case references, the entities involved, the findings under Items (6) and (8), the charges that failed and the penalty of reprimand.