LawRato

Auditor did incomplete work and now asking for unjustified dues


29-Sep-2023 (In Corporate Law)
Dear Sir, I am a director of a Pvt. Ltd. Company (Manufacturing Unit) based in Delhi. I and my wife are Directors of Company. My current (2015-16) turn over is 32,00,000/-. Company is 8 years old. Now, My auditor is trying to exploit us. He does not give us and data (Books of Accounts) of the company except Balance Sheet and P & L. He has not completed our sales tax assessment even FY 2009-10, 2010-11 , 2011-12 and till date. He had not even filled Balance Sheet in ROC for FY 2014-15. We are under small scale industries. Now, we do not want to let him give our work. We asked him to return our all document and his resignation so that we can appoint a new auditor. Now, he demanded 1 Lac (approx) rupees as fees. We got shocked because we have already cleared all his dues whatever earlier decided. He told that the amount is outstanding in the financial of 2014-15. The balance sheet that he had given us there was written a word 'Other Liabilities' that covers his outstanding balance. How can we remove him without trouble?
Answers (3)

Answer #1
631 votes
If there is any due on your side then the best way to get rid of him is to pay his due.
Otherwise you can send him a legal notice asking him to return all the document and papers related to your business and organization and then you should further publish it in newspapers (vernacular). This would solve your crisis and you can further appoint a new auditor.
But if he comes behind you then you need to approach the Judiciary.
Answer #2
611 votes
Thank you for your e-mail.

You can take two recourse one is that you may file a formal complain against the Auditor before the disciplinary committee of ICAI and also before the office of the Auditor General. I hope you do not have a written agreement or any formal communication for charge of one lakh.

Secondly you may file a civil suit for fraud against him.

Thanks
Saurabh
Answer #3
666 votes
As per your version this is a clear cut matter of professional misconduct, for which you may either file a complaint against him before ICAI whereas ICAI has internal investigaion department which conducts investigations against CAs, Auditors etc.
Secondly, you may pass a resolution to discard him from your company and may issue notice to him to resign and also to submit all the documents, information belongs to you and your company and as far as his fee is concern so he has the option to file claim against the company but only because of non clearance of fee he can't blackmail you as it is amount to professional misconduct.

Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.

Report abuse?

Comments by Users

No Comments! Be the first one to comment.

"lawrato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."