The professional reasons for not accepting an audit are: (i) Non-compliance of the provisions of the Companies Act as mentioned in Clause (9) of Part-I of First Schedule to the Chartered Accountants Act, 1949; (ii) Non-payment of undisputed audit fees by auditees other than in case of sick units; and (iii) Issuance of a qualified report. In the first two cases, an auditor who accepts the audit would be guilty of professional misconduct. In the last case, however, he may accept the audit if he is satisfied that the attitude of the retiring auditor was not proper and justified. If, on the other hand, he feels that the Retiring auditor had qualified the report for good and valid reasons, he should refuse to accept the audit

Yes, Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949 is equally applicable in case of nationalized and other Banks and also to Government agencies.

No, a Chartered Accountant in practice shall be deemed to be guilty of professional misconduct if he accepts an appointment as auditor of a company without first ascertaining from it whether the requirements of sections 139 and 141 of Companies Act, 2013 in respect of such appointment have been duly complied with. In this regard, the Council has laid down detailed guidelines that are appearing in commentary under Clause (9) of Part I of the First Schedule to the Chartered Accountants Act, 1949 in Code of Ethics.

No, if any annual general meeting is adjourned without appointing an auditor, no special notice for removal or replacement of the retiring auditor received after the adjournment can be taken note of and acted upon by the Company, since in terms of Section 115 of the Companies Act, 2013, special notice should be given to the Company at least fourteen clear days before the meeting in which the subject matter of the notice is to be considered. The meeting contemplated in Section 115 undoubtedly is the original meeting. Where at any annual general meeting, no auditor is appointed or re-appointed, the existing auditor shall continue to be the auditor of the company mentioned in Section 139.

Following are examples of actions that might be safeguards to address such a self-interest threat include: a. Asking the existing or predecessor accountant to provide any known information of which, in the existing or predecessor accountant’s opinion, the proposed accountant needs to be aware before deciding whether to accept the engagement. For example, inquiry might reveal previously undisclosed pertinent facts and might indicate disagreements with the existing or predecessor accountant that might influence the decision to accept the appointment. b. Obtaining information from other sources such as through inquiries of third parties or background investigations regarding senior management or those charged with governance of the client.

A professional accountant shall periodically review whether to continue with the engagement. Potential threats to compliance with the fundamental principles might be created after acceptance which, had they been known earlier, would have caused the professional accountant to decline the engagement. For example, a self interest threat to compliance with the principle of integrity might be created by improper earnings management or balance sheet valuations.