The Board of Discipline of the Institute of Chartered Accountants of India (ICAI) has found Chartered Accountant Manmohan Jhawar guilty of professional misconduct for accepting a statutory audit assignment without first communicating with the existing auditor, as mandated under the Chartered Accountants Act, 1949.

The order, dated February 5, 2026, was passed under Section 21A(3) of the Chartered Accountants Act, 1949. The Board imposed a monetary penalty of ₹25,000 after concluding that the respondent had violated specific provisions governing professional conduct.

The complaint was lodged by CA Bimal Chandra Bothra, who had been serving as the statutory auditor of K.B. Syndicate Pvt. Ltd. and Saksena Bros. Pvt. Ltd. until the financial year 2023–24. According to the complaint, Bothra resigned from his position on October 14, 2023, alleging that the companies had failed to provide the necessary books of accounts, documents, and explanations required to complete the audit for FY 2022–23.

However, prior to this resignation, CA Manmohan Jhawar had already conducted and completed the statutory audit of the two companies for FY 2022–23 on August 30 and 31, 2023.

The complainant contended that Jhawar accepted and carried out the audit assignment without issuing a prior written communication to him as the existing auditor—an obligation clearly prescribed under Item (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949.

The complaint further alleged non-compliance with Sections 139 and 140 of the Companies Act, 2013, which deal with the appointment, re-appointment, and resignation of auditors. These provisions require strict procedural adherence to ensure transparency and continuity in statutory audits.

Under Item (8) of Part I of the First Schedule to the Chartered Accountants Act, a Chartered Accountant in practice is prohibited from accepting a position as auditor of a company without first communicating in writing with the previous auditor. This requirement is designed to safeguard professional integrity and prevent disputes arising from incomplete disclosures or unresolved issues.

Additionally, the Board also examined the matter under Item (9) of Part I of the First Schedule, which addresses failure to comply with applicable professional standards.

After examining the records, submissions, and relevant statutory provisions, the ICAI Board of Discipline concluded that the allegations were substantiated. It held that CA Manmohan Jhawar had indeed accepted the audit engagement without fulfilling the mandatory requirement of prior written communication with the existing auditor.

The Board determined that such conduct amounted to professional misconduct under Items (8) and (9) of Part I of the First Schedule to the Chartered Accountants Act, 1949.

Consequently, exercising its powers under Section 21A(3) of the Act, the Board imposed a penalty of ₹25,000 on the respondent.

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