Professional misconduct by chartered accountant established for issuing certificates without proper verification and due diligence.

A chartered accountant who issued certificates supporting loan facilities without adequate verification, supporting documents or reliable working papers was found to have acted negligently and unprofessionally, amounting to professional misconduct under the disciplinary framework. The Court noted that his inability to substantiate the valuations and his own admission before the Committee reinforced the finding of misconduct. No procedural irregularity was found in the inquiry, Council reconsideration or final action, and the recommendation to reprimand him was accepted.

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Issues: Whether the respondent chartered accountant was guilty of professional misconduct for issuing certificates without proper verification and due diligence, and whether the Council's recommendation of reprimand under the disciplinary framework warranted acceptance.

Analysis: The reference arose under the disciplinary scheme of the Chartered Accountants Act, 1949 and the relevant Regulations governing inquiry, report, reconsideration by the Council, and final action. The record showed that the respondent issued multiple certificates supporting loan facilities, but his working papers did not disclose any reliable basis for the valuation or verification stated in those certificates. He was unable to produce supporting documents when called upon, and the material before the Committee and the Council indicated that the certifications were made without adequate verification of the underlying facts and assets. The respondent's own admission before the Committee that he had committed the misconduct and sought pardon was also taken into account. The Court found no procedural irregularity in the manner in which the Committee and the Council conducted the matter and held that issuing certificates in such circumstances was unprofessional and negligent, amounting to misconduct.

Conclusion: The respondent was held guilty of professional misconduct and the recommendation to reprimand him was accepted.

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