Arjun (A) — Hey
Shrikrishna, all these years I believed that YOU make sure that there is rule
of justice in the world! But…….
Shrikrishna (S) — Yes, Arjun.
‘But’ what?
A — Now,
I have grave doubts about it! You had said everybody gets the fruits of his
deeds – his karmas.
S — Yes.
That’s right.
A — And
you also said that a person is himself responsible for his own progress or
downfall.
S — Correct.
A — And
further; I also remember you saying – a person is his own friend and his own
foe! Right?
S — Absolutely!
Hundred per cent marks to your memory!
A — But
then, I find that our CA friends are suffering due to misdeeds of others.
S — Why?
What happened?
A — See,
my friend is practicing for the past 20 years. Totally unblemished track
record!
S — This
is a bold statement. It only means that his lapses have not been exposed so
far!
A — Whatever
you may say. But so far he never had any problem.
S — Good.
A — He
signed one company’s audit for one year in good faith.
S — What
do you mean by good faith? One should never certify any accounts merely on
faith; unless one verifies it.
A — Actually,
his friend said, he has exhausted the limit of number of companies that one can
audit. He said, this was a group company and he had seen everything.
S — Oh!
A — Now,
the directors of that company misused his signature. No doubt, he signed for
one year; but directors uploaded the balance sheets of 3 or 4 subsequent years
to ROC as if my friend had signed them.
S — Strange!
A — And
later on it was revealed that the management was totally fraudulent. They had
formed many companies, got them listed on stock exchanges and did a lot of
financial irregularities. All documents were fabricated!
S — So,
what happened to your friend?
A — Somebody
made a complaint to our Institute saying that he relied on these balance sheets
and was duped!
S — Naturally.
Anybody would do that if he has suffered.
A — No.
The funny part is that the complainant also turned out to be a fraudulent
person. Both the complainant as well as the chairman of the company were behind
bars!
S — Good.
I told you that everybody gets the fruits of his karma. Each one of them
became the enemy of himself. So, what I told you in Mahabharata was true!
A — Yes. But why should my friend suffer? He was
unnecessarily dragged into the disciplinary case. He did not even receive his
fees!
S — How
do you say ‘unnecessarily’?
A — Of
course! Both the parties were criminal. How is auditor answerable? What is his
mistake?
S — Arjun,
just think for a while. Is it not a fact that he signed the audit papers?
A — Yes.
But only for one year.
S — OK.
But for that year, had he checked the books and records properly?
A — But
it was fraud!
S — So
what? Did he write to the previous auditor? Did he check up validity of his
appointment? Did he upload necessary forms like form ADT 1 to ROC? Did he
obtain management representation letter? Clause 7 of Second Schedule clearly
covers both – gross negligence and lack of due diligence.
A — No.
S —
Then! See my dear, God helps the diligent.
A — That
means he was duped by his friend. I believe, that friend is also facing
complaints.
S — I
told you many times. Your Council is concerned with your conduct; not anybody
else’s. Have you acted diligently as a professional? What prevented you from
refusing to sign?
A — Temptation!
And also the faith in the friend!
S — That
is very common among all professionals. Rather, it is human instinct.
A — Actually,
the management promised to help him in the proceedings. They said they would
take care. But now they backed out. They are themselves in difficulty! It had
come in the press also.
S — That’s
what I am saying. Your friend may not be involved in the fraud. But did he
inform police about forgery or all these happenings?
A — He
was so afraid! He said both the parties are criminal.
S — Whatever
it is. But he has to face the music. It will be better if he pleads guilty. At
least, his case may be considered sympathetically. Confession often helps.
A — Can
he be absolved?
S — Difficult.
He may be held guilty of misconduct; but punishment may be soft if he comes out
clean.
A — Yes,
Lord! I take back my words. This is a good lesson to all of us. We cannot claim
to be totally innocent. It is a breach of duty as a CA. There is no point
blaming others.
S — So
then, I am sure, you will take care.
A — Yes
Lord! Please protect me.
S — Tathastu.
Om Shanti.
Note:
The above dialogue is based on Clause (7) of
Part I of Second Schedule. Once again, it emphasises how we professionals take
certain assignments only on good faith and take various aspects for granted.
Shri Krishna, in the above dialogue has rightly pointed out – ‘God helps the
diligent’.
