Clarification on Statutory Auditor of a Company giving feedback to Credit Rating Agencies about Auditee Client:
The Institute has been receiving queries from the members as to whether Statutory Auditor of a Company can give feedback of the said Company to the Credit Rating Agencies (CRAs).
It is hereby clarified that under the provisions of Chartered Accountants Act,1949 it is not permissible to members to share client information with the CRAs, except if permitted by the Auditee client.
The members may ensure compliance with the above. Failure to comply with the same shall result in professional misconduct in terms of the of the provisions of Chartered Accountants Act,1949 and the Code of Ethics.
Signing Audit report of client where Audit fees is pending:
“This is to kindly bring to your notice that a recent guideline has come from Disciplinary Committee of ICAI. As per Section 410.7 subclause A1 of The ICAI Act,1949 an Auditor can not sign the Audit Report of any assessee if there is any audit fee pending for previous years as on the date of audit report signing.
This is due to the reason that in spite of the pending Audit Fees, the Auditors used to sign the Audit Report. In such a case the auditor would be treated as related party of the assessee under section 511 which will instigate disciplinary action on the CA as well as on the CA firm signing such balance sheet.”