ICAI disciplinary panel overlooks stay to pass order against 2 partners of PwC arms
May 18, 2024
Synopsis
Despite a Delhi High Court stay, the Institute of Chartered Accountants of India (ICAI) has published orders penalizing two PwC affiliate partners. PwC had obtained a stay against ICAI's disciplinary action, challenging fines and membership removal. The institute's move to upload the order on its website has sparked a legal battle. This follows a similar dispute with EY affiliates. The Big Four firms are contesting ICAI's disciplinary actions, demanding an appellate tribunal be established first.
The legal tug of war between the Big Four firms and the Institute of Chartered Accountants of India (ICAI) is intensifying with the regulator's disciplinary committee publishing its orders against two partners of PwC affiliates despite the firm obtaining a stay order on the matter, two people familiar with the matter said.
PwC had on May 13 approached the Delhi High Court to challenge ICAI disciplinary action against its affiliates' partners and the court issued a stay order in the matter on Friday in the presence of the counsel of the ICAI disciplinary committee, the sources said.
Yet, the institute uploaded its order on its website, they added.
The ICAI order fined the two partners ₹3 lakh and removed them from the institute's membership for three years. The order also said the PwC affiliates should stop working with international entities and submit a compliance report within 90 days.
"We are disappointed to note that the ICAI has published the said orders in the public domain, which is not in accordance with the court proceedings before the Hon'ble Delhi High Court, which was held in the presence of the ICAI disciplinary committee counsel," a spokesperson for Price Waterhouse & Affiliates said. "We have accordingly asked the ICAI to immediately take down the orders from their website."
The spokesperson further claimed these matters are not unique to PwC but are general industry-wide issues, and do not in any manner pertain to the firm's audit procedures or the quality of their delivery.
Recently, the Delhi High Court had issued a stay order against ICAI concerning its actions against EY affiliate firms SV Ghatalia & Co, SR Batliboi & Associates LLP, SRBC & Co LLP, and SR Batliboi & Co LLP, as well as two partners.
Now, affiliate audit firms of all Big Four firms - EY, Deloitte, KPMG and PwC - are involved in a legal fight with the institute that oversees the audit profession in India.
The top firms contend that ICAI disciplinary orders should not be passed until the institute establishes an appellate tribunal to contest these orders and that is why they have had to approach the courts.
[The Economic Times]
