A company's outgoing auditor refuses to give a No Objection Certificate (NOC) for the incoming auditor. Per ICAI Code of Ethics, the incoming auditor should:
ACommunicate with the outgoing auditor in writing before accepting and consider reasons for non-cooperation; only accept after due diligence
BAccept the engagement without inquiry
CThreaten the outgoing auditor
DReport to ROC immediately
Answer & Solution
Correct answer: A. Communicate with the outgoing auditor in writing before accepting and consider reasons for non-cooperation; only accept after due diligence
1. Clause (8) of Part I of First Schedule requires communication with predecessor auditor in writing.
2. NOC itself is professional courtesy, not statutory; the substantive obligation is communication and due diligence.
3. Accepting without inquiry breaches the Code.
_Source: ICAI BoS CA Final Paper 3, Ch 5 "Company Audit"_
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