CA institute officials under lens

Enforcement directorate is going to summon some senior officials of the Institute of Chartered Accountants of India (ICAI) as the institute had failed to initiate action against the chartered accountants (CAs) involved in chit fund scams. The accused CAs had vouched false audit reports.

When the SFIO (Serious Fraud Investigation Office) had been analyzing the audit reports of the Ponzi firms, the fabricated reports made by these CAs had led them nowhere.

ED, while probing the Saradha scam, found that the CAs had given false statements while making the audit reports. The agency found that a number of these CAs were directly involved in the scam. Not only the CAs involved with Saradha, but CAs involved with other chit funds were also found submitting false reports.

ED's special director Yogesh Gupta, who is himself a CA, wrote to the ethical committee of the institute complain about these unethical CAs. Some CAs had told ED that they were removed from the Ponzi firms when they refused to sign bogus audit reports.

The ethical committee was asked to initiate action against the CAs and already about 40 CAs have been identified for such unethical practices. According to ED officials, 10 of them were in gross misconduct, being part of the nexus.

An ED official said, "About 15 other CAs had been grossly negligent as they did not verify the audit reports properly and simply signed them. Another 15 CAs were found to be negligent and failed to perform their duty according to professional rules."

ICAI is yet to take action against these CAs. The institute informed ED that there was no proper process to cancel the practicing certificate. (Times)