A Chartered Accountant who deliberately certifies false incoming certificates is guilty of professional misconduct and is liable to be suspended from practice.

S. PARVATHA RAO, J.

( 1 ) THIS is a case forwarded under sub-section (5) of Section 21 of the Chartered Accountants Act, 1949 ( the Act* for short) by the Council of the Institute of Chartered Accountants of India ( the Council for short) for passing necessary orders in accordance with sub-section (6) of S. 21 of the Act. The respondent is a member of the Institute of Chartered Accountants of India ( the Institute for short ). On a complaint dated 26-10-1979 by the Audit Bureau of Circulation Ltd. ( the Bureau for short) against the respondent, the Council formed a prima facie opinion that the respondent has been guilty of misconduct and referred the case against the respondent to the Disciplinary Committee for inquiry. After inquiry the Disciplinary Committee gave its report dated 26-4-1981. On a consideration of the report after notice to the complainant, i. e. the Bureau, and to the respondent, and, after giving opportunity to them, which was not availed of by the respondent, the Council on 2-6-1989 found that the respondent was guilty of professional misconduct under clauses (5), (6) and (9) of Part I of the Second Schedule to the Act in so far as:"a) he had failed to disclose a material fact known to him, (i. e. , the fact of existence of unbanked receipts) which was not disclosed in the Incoming Certificates in respect of the andhra Bhoomi , the deccan Chronicle and the Andhra Bhoomi Sachitra Vara Patrika for the audit period January/june, 1978 as audited and certified by him but the disclosure of which was necessary to make the said Certificate not misleading; b) he had failed to report a material mis statement known to him to appear in the above mentioned Certificates with which he was concerned in a professional capacity; and c) he had failed to invite attention to a material departure from the generally accepted procedure of audit applicable to the circumstances of this case. "the Council recommends that the respondent be reprimanded.

( 2 ) NOTICE of hearing of the case was given to the respondent, i. e. , Shri V. I. Oommen, Chartered Accountant, after posting the case for hearing on 20-9-f995. Mr. C. Malla Reddy has filed his appearance for the respondent. We heard him and the learned counsel for the Institute, Mr. A. V. S. Rama Krishnaiah, and Mr. P. Innayya Reddy for the Central Government.

( 3 ) AT the outset it is necessary to have an idea about the Bureau and its functions. From the Bureau s booklet a Guide to ABC Audit it is seen that the Bureau is a Co-operative Association of Publishers, Advertisers and Advertising Agencies, furnishing accurate reports of publication circulation. The Bureau has established a uniform procedure for obtaining the required information and that procedure is known as the ABC Audit , i. e. , standards and method of audit by which circulation are measured. These standards are uniformly applied to all publications in respect of which members are registered with the Bureau "with a view to providing both for the publisher and the advertiser an honest measure of circulation which can be accepted without reserve in any country". It is stated that "the essence of an ABC audit is that it is carried out on a uniform basis, rigidly and without the slightest variation in any respect". It is further stated as follows: "an important aspect of the circulation audit is to check the cash received for copies purported to have been sold and to ensure it has been banked regularly and intact on the following day except on a bank holiday, in which case it is deposited on next working day. Similarly, in regard to newsprint purchases, wastage and disposal etc. it is essential that they are integrated with the financial records of the business as a whole. "the audit is entrusted to Chartered Accountants and they are furnished with the book-let. In the April, 1960 issue of the Chartered Accountant , which is an official journal of the Institute, the attention of the members of the Institute i

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