On February 8, 2024, the Supreme Court (SC) upheld Rule 9(3)(b) under the Chartered Accountants’ (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. This Rule empowers the Institute of Chartered Accountants of India (ICAI)’s Disciplinary Committee to re-investigate any professional misconduct complaint against any ICAI member (chartered accountant, in short, CA). The Rule indicates that the Board of Discipline can refer the complaint to the Disciplinary Committee despite the Director (Discipline) absolving the errant member of the alleged professional misconduct complaints. Affirming the Delhi High Court’s ruling by dismissing the appellant CA’s appeal, the SC upheld section 21A(4) of the Chartered Accountants (Amendment) Act, 2006, and observed that impugned Rule 9(3)(b) is not ultra vires of Section 21A(4). The SC further observed that the intent of the said Rule conforms to the very object and purpose of the Chapter on “Misconduct” under the Act of 2006. Against that backdrop, the present study motivates by revisiting the Rule’s scope to assess whether it could minimize the CAs’ professional misconduct.

Chartered accountant, professional misconduct, Disciplinary Committee, Supreme Court

Alrashidi, R., Baboukardos, D., & Arun, T. (2021). Audit fees, non-audit fees and access to finance: Evidence from India. Journal of International Accounting, Auditing and Taxation, 43, 100397.

Arirail, D., & Crumbley, L. (2019). PwC and the colonial bank fraud: A perfect storm. Journal of Forensic and Investigative Accounting, 11(3), 440–458.

Baker, C. R., Bédard, J., & Pratdit Hauret, C. (2014). The regulation of statutory auditing: An institutional theory approach. Managerial Auditing Journal, 29(5), 371–394.

Board of Control for Cricket in India v. Cricket Association of Bihar, (2015) 3 SCC 251.

Bottausci, C., & Robson, K. (2023). “He Hears”: An essay celebrating the 25 year anniversary of the Audit Society. Critical Perspectives on Accounting, 97, 102581.

Brown, R. G. (2020). Changing audit objectives and techniques. In The evolution of audit thought and practice (pp. 1–8). Routledge.

C. Krishna Babu v. Institute of Chartered Accountants of India, MANU/AP/0327/2000.

Choi, W., Mande, V., & Son, M. (2019). How to investors react to auditor resignations? International Journal of Accounting and Finance, 9(2–4), 205–227.

Christensen, B., Glover, S., & Wolfe, C. (2014). Do critical audit matter paragraphs in the audit report change nonprofessional investors’ decision to invest? Auditing: A Journal of Practice & Theory, 33(4), 71–93.

D’Andreamatteo, A., Grossi, G., Mattei, G., & Sargiacomo, M. (2024). The intersection between ‘The Audit Society’ and public sector corruption and fraud: A literature review and future research agenda. Qualitative Research in Accounting & Management, 21(1), 29–40.

D. K. Agrawal v. Council of Institute of Chartered Accountants of India, MANU/SC/0837/2021

DeAngelo, L. (1981). Auditor independence, low-balling and disclosure regulation. Journal of Accounting and Economics, 3(2), 113–127.

Deb, R. (2021). Yes Bank fiasco: A corporate governance failure. Decision, 48(2), 181–190.

Deb, R. (2024a). Limning auditing Indian auditors. Jindal Journal of Business Research, 13(2), 198–212.

Deb, R. (2024b). Fraud prevention and auditors’ resignation—Indian evidence. Metamorphosis: A Journal of Management Research, 24(1), 21–30.

Deepal, A. G., & Jayamaha, A. (2022). Audit expectation gap: A comprehensive literature review. Asian Journal of Accounting Research, 7(3), 308–319.

DeFond, M. L. (1992). The association between changes in client firm agency costs and auditor switching. Auditing: A Journal of Practice and Theory, 11(1), 16–31.

Deputy Secretary, Government of India v. S. N. Das Gupta, AIR 1956 Cal 414.

Dermarkar, S., & Hazgui, M. (2022). How auditors legitimize commercialism: A micro-discursive analysis. Critical Perspectives on Accounting, 83, Article 102228.

Dr. Suresh Gupta v. NCT of Delhi, (2004) 6 SCC 422.

Dunne, N. J., Brennan, N. M., & Kirwan, C. E. (2023). How the big four maintain and defend logic equilibrium at concurrent performances. Critical Perspective on Accounting, 94, 102479.

Ege, M., Knechel, W. R., Lamoreaux, P. T., & Maksymov, E. (2020). A multi-method analysis of the PCAOB’s relationship with the audit profession. Accounting, Organizations and Society, 84(C), 101–131.

Everett, J., Friesen, C., Neu, D., & Rahaman, A. S. (2018). We have never been secular: Religious identities, duties, and ethics in audit practice. Journal of Business Ethics, 153(4), 1121–1142.

Ghosh, S. (2025, June 16). NFRA slaps notices on IndusInd auditors. The Economic Times.

Hari Sao v. State of Bihar, (1969) 3 SCC 107.

Harinderjit Singh v. Disciplinary Committee Bench-III, The Institute of Chartered Accountants of India, MANU/DE/4378/2024.

Hassink, H. F., Bollen, L. H., Meuwissen, R. H., & de Vries, M. J. (2009). Corporate fraud and the audit expectations gap: A study among business managers. Journal of International Accounting, Auditing and Taxation, 18(2), 85–100.

Hulme, S., Disley, E., & Blondes, E. L. (2021). Mapping the risk of serious and organised crime infiltrating legitimate businesses: Final report. European Union.

Humphrey, C., Sonnerfeldt, A., Komori, N., & Curtis, E. (2021). Audit and the pursuit of dynamic repair. European Accounting Review, 30(3), 445–471.

Institute of Chartered Accountants of India v. L. K. Ratna, (1986) 4 SCC 537.

Institute of Chartered Accountants of India v. M. S. Rathi, (2017) 8 SCC 539.

Institute of Chartered Accountants of India v. Mukesh Gang, MANU/AP/0809/2016.

Institute of Chartered Accountants of India v. Price Waterhouse, (1997) 6 SCC 312.

Institute of Chartered Accountants of India v. Somnath Basu, MANU/WB/0675/2006.

Institute of Chartered Accounts v. P. K. Mukheerjea MANU/SC/0007/1957.

Jacob Mathew v. State of Punjab, (2006) 5 SCC1.

Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency cost, and ownership structure. Journal of Financial Economics, 3(4), 305–360.

Juric, D., O’Connell, B., Rankin, M., & Birt, J. (2018). Determinants of the severity of legal and employment consequences for CPAs named in SEC accounting and auditing enforcement releases. Journal of Business Ethics, 147(3), 545–563.

Kachelmeier, S., Rimkus, D., Schmidt, J., & Valentine, K. (2020). The forewarning effect of critical audit matter disclosures involving measurement uncertainty. Contemporary Accounting Research, 37(4), 2186–2212.

Kaplan, S., & Williams, D. (2013). Do going concern audit reports protect auditors from litigation? A simultaneous equations approach. The Accounting Review, 88(1), 199–232.

Kaushik, M. (2024, October 11). Over 40% of ICAI probes reveal CA misconduct. The Financial Express.

Klein, B., & Leffler, K. B. (1981). The role of market forces in assuring contractual performance. Journal of Political Economy, 89(4), 615–641.

Lennox, C., & Li, B. (2020). When are audit firms sued for financial reporting failures and what are the lawsuit outcomes? Contemporary Accounting Research, 37(3), 1370–1399.

Mande, V., & Son, M. (2011). Do audit delays affect client retention? Managerial Auditing Journal, 26(1), 32–50.

Mohd. Ibrahim v. State of Bihar, (2009) 8 SCC 751.

Nallareddy, S., & Ogneva, M. (2017). Predicting restatements in macroeconomic indicators using accounting information. The Accounting Review, 92(2), 151–182.

Naresh Chandra Agrawal v. Institute of Chartered Accountants of India, 2024 LiveLaw (SC) 101.

Neera Yadav v. Central Bureau of Investigation, (2017) 8 SCC 75.

N. V. Subbarao v. State, (2013) 2 SCC 162.

Palmer, D., & Maher, M. (2006). Developing the process model of collective corruption. Journal of Management Inquiry, 15(4), 363–370.

Palmrose, Z., Richardson, V. J., & Scholz, S. (2004). Determinants of market reactions to restatement announcements. Journal of Accounting and Economics, 37(1), 59–89.

Paterson, A. S., Changwony, F., & Miller, P. B. (2019). Accounting control, governance and anti-corruption initiatives in public sector organisations. The British Accounting Review, 51(5), Article 100844.

Porter, B. (1993). An empirical study of the audit expectation-performance gap. Accounting and Business Research, 24(93), 49–68.

Power, M. (1997). The audit society: Rituals of verification. Oxford University Press.

Price Waterhouse v. SEBI, MANU/MH/1027/2010.

Punjab State Government v. K. N. Chandla, MANU/HP/0095/1972.

Quadackers, L. M., Groot, T., & Wright, A. (2014). Auditor’s professional skepticism: Neutrality versus presumptive doubt. Contemporary Accounting Research, 31(3), 639–657.

Ram Mohan, M. P., & Raj, V. (2020, September). Auditors’ negligence and professional misconduct in India: A struggle for a consistent legal standard [IIMA Working Paper No. 2020-09-01]. IIMA.

Registrar of Companies v. P. Arunajatai, AIR1963 Mad99.

Reichborn-Kjennerud, K., Gonzalez-Díaz, B., Bracci, E., Carrington, T., Hathaway, J., Jeppesen, K., & Steccolini, I. (2019). SAIs work against corruption in Scandinavian, South European and African countries: An institutional analysis. The British Accounting Review, 51(5), 100842.

Roussy, M. (2013). Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager. Critical Perspectives on Accounting, 24(7–8), 550–571.

S. Ganesan v. A. K. Joscelyne, AIR 1957 Cal 33.

S. Sukumar v. The Secretary, Institute of Chartered Accounts of India, (2018) 14 SCC 360.

Saad, E. B., & Lesage, C. (2009). Why are auditors over-blamed in accounting frauds? [Working paper]. HEC Paris.

Sikka, P., Puxty, A., Willmott, H., & Cooper, C. (1998). The impossibility of eliminating the expectations gap: Some theory and evidence. Critical Perspectives on Accounting, 9(3), 299–330.

Simnett, R., & Smith, A. (2005). Public oversight: An international approach to auditing. In T. Campbell & K. Houghton (Eds), Ethics and auditing (pp. 45–62). ANUE Press.

Sirois, L., Bédard, J., & Bera, P. (2018). The informational value of key audit matters in the auditor’s report: Evidence from an eye-tracking study. Accounting Horizons, 32(2), 141–162.

Slager, R. (2017). The discursive construction of corruption risk. Journal of Management Inquiry, 26(4), 366–382.

Sridharan, R. (2020, December 24). The role of the National Financial Regulating Authority in independent audit regulation. The 35th Regional Conference of the Western India Regional Council of the Institute of Chartered Accountants of India.

Srivats, K. R. (2024a May 4). ICAI’s actions on multinational accounting firms follow SC diktats. The Business Line.

Srivats, K. R. (2024b July 8). ICAI is free to proceed against entire firm for misconduct, Delhi High Court rules. The Business Line.

Srivats, K. R. (2024c September 18). NFRA issues consultation paper on revamp of key auditing standard. The Business Line.

Superintendent of Police v. R. Rajamany, (1961) SCC OnLine Mad 86.

Sushil Kumar Singhal v. Regional Manager, Punjab National Bank, (2010) 8 SCC 573.

T. A. Kathiru v. Jacob Mathai, (2017) 5 SCC 755.

Union of India v. Deloitte Haskins and Sells LLP, MANU/SC/0518/2023.

Upadhyay, J. P., & Sultana, N. (2018, June 5). 32 auditors of listed firms have resigned in the last 5 months. The Mint.

Vinayak Narayan Deosthali v. Central Bureau of Investigation, (2015) 2 SCC 553.

Wang, Y., Ashton, J. K., & Jaafar, A. (2023). Financial statement fraud, recidivism and punishment. Emerging Markets Review, 56, 101033.

Westermann, K. D., Cohen, J., & Trompeter, G. (2019). PCAOB inspections: Public accounting firms on “trial”. Contemporary Accounting Research, 36(2), 694–731.