Underlining that it was the first case on professional misconduct by auditors before the NCLAT, the tribunal bench led by justice Rakesh Kumar Jain declared that an errant CA cannot question the jurisdiction of the NFRA on the grounds that only the ICAI is authorised to take disciplinary action against her. The NFRA has the power to investigate the professional misconduct of the auditors, said the tribunal, adding if NFRA starts investigating any case, no other institution has the power to continue or initiate any parallel proceeding. Section 132 stipulates the constitution of the NFRA to provide for matters relating to accounting and auditing standards under the 2013 Act. Advocate called it an “epochal judgment” that underscores the significance of discipline and decorum amongst the CA community. The tribunal rejected the CAs’ contention that their role was limited to the audit of a few branches and hence, they cannot be saddled with a larger liability.

Source: Hindustan Times December 04, 2023 13:42 UTC