CA Ajeet, a Chartered Accountant in practice, was appointed as the statutory auditor of Climax Manufacturing Limited. After accepting the…

CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · November 2026
CA Ajeet, a Chartered Accountant in practice, was appointed as the statutory auditor of Climax Manufacturing Limited. After accepting the appointment, he became aware that certain provisions of the Companies Act, 2013 required the auditor to perform specific procedures and discharge certain statutory responsibilities. However, while conducting the audit, CA Ajeet did not comply with the prescribed requirements and instead followed procedures that were inconsistent with the provisions of the Companies Act, 2013. With reference to the Chartered Accountants Act, 1949 and Schedules thereto, examine whether CA Ajeet is guilty of professional misconduct.

Suggested Answer and Working Notes:

As per Clause (5) of Part II of Second Schedule to the Chartered Accountants Act, 1949 a member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct, if he acts as an auditor of the company in contravention of the provisions of the Companies Act, 2013. In the given case, CA Ajeet while acting as the statutory auditor of Climax Manufacturing Limited, did not comply with the prescribed requirements of the provisions of the Companies Act, 2013. Hence in the given case, CA Ajeet will be held guilty of professional misconduct under Clause (5) of Part II of Second Schedule to the Chartered Accountants Act, 1949.

Topics: Professional Ethics & Liabilities of Auditors

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