Date: 24 May 2024

Introduction of ICAI Centralized NOC Policy for New Auditors

Centralized NOC Policy to Identify New Auditors accepting audits without communicating with the previous auditors 

Legal Provision for NOC from Previous Auditor: 

As per clause (8) of Part I of the First Schedule to the CA Act, 1949, Every Auditor must communicate with previous auditor before accepting the position of auditor. In other words New auditor must obtain NOC from previous auditor before accepting audit. 

Consequences of not obtaining NOC from previous auditor: 

If New auditor fails to obtain NOC from previous auditor, the new auditor would be held guilty of professional misconduct.     

Need of Centralized NOC Policy:

Communicating with the previous auditor and obtaining NOC is crucial before accepting a new audit assignment for an entity. Specially Young Chartered Accountants face a lot of problems while getting NOC from Senior chartered Accountants. 

If an auditor accepts an assignment without following this procedure, it can be difficult for the previous auditor to identify the new auditor and result in lost outstanding fees and new auditor would be held guilty of professional misconduct  As per clause (8) of Part I of the First Schedule to the CA Act, 1949.

Launching of Centralized No Objection Certificate (NOC) policy on the UDIN Portal

To address this longstanding issue, the Institute of Chartered Accountants of India (ICAI) is launching a Centralized No Objection Certificate (NOC) policy on the UDIN Portal (https://udin.icai.org/) to streamline the process. 

This progressive step aims to improve coordination between current and previous auditors.