Nfra

NFRA slaps fine of Rs 4.5 cr on auditors for Reliance Capital audit lapses

The National Financial Reporting Authority (NFRA) has slapped penalties totalling Rs 4.5 crore on an audit firm and two auditors for professional misconduct for alleged auditing lapses of Reliance Capital's financials in 2018-19. A fine of Rs 3 crore has been imposed on Pathak H D & Associates, Rs 1 crore on Parimal Kumar Jha and Rs 50 lakh on Vishal D Shah. Besides, Jha and Shah have been debarred from taking up audit work for 10 years and 5 years, respectively, according to an order. Jha was the Engagement Partner (EP) and Shah was the Engagement Quality Control Review (EQCR) Partner for the statutory audit of Reliance Capital for 2018-19 fiscal. For 2018-19, the company was jointly audited by Price Waterhouse & Co LLP (PW) and Pathak HD & Associates. PW reported suspected fraud regarding loans and investments amounting to approximately Rs 12,571 crore to some group companies. In the order dated April 12, the NFRA said that despite the reporting of suspected fraud and ...

DHFL branch audits: NFRA penalises 18 auditors, debars them for 6-12 months

The National Financial Reporting Authority (NFRA) has imposed penalties on 18 auditors and also debarred them for varying periods for lapses with respect to audits of various branches of housing finance company DHFL. Penalties totalling Rs 18 lakh or Rs 1 lakh each has been imposed on the auditors for their professional misconduct, according to 18 separate orders passed by the regulator. Also, they have been debarred for a period of six months to one year from "being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate". Out of the 18 auditors, 4 have been debarred for 6 months and the remaining 14 auditors have been restrained for 1 year. Following media reports of alleged siphoning of public money of around Rs 31,000 crore and the Enforcement Directorate's reported action in April 2020 on an alleged banking fraud of about Rs 3,700 crore by the

NFRA slaps Rs 1.10 cr fine on 3 entities in Coffee Day Enterprises matter

The National Financial Reporting Authority has imposed fines totalling Rs 1.10 crore on three entities, including two individual auditors, in connection with lapses in auditing of Tanglin Developments Ltd (TDL), a subsidiary of Coffee Day Enterprises Ltd. Besides, the auditing firm -- Sundaresha & Associates -- and the two auditors -- C Ramesh and Chaitanya G Deshpande -- have been barred from taking up auditing work for varying periods. The case pertains to the diversion of funds worth Rs 3,535 crore from seven subsidiary companies of Coffee Day Enterprises Ltd (CDEL), a listed company, to Mysore Amalgamated Coffee Estate Ltd (MACEL). NFRA has found lapses in auditing of the books of TDL for 2019-20. The regulator said it has taken a stern action against the three entities for professional misconduct and failure to report irregularities in the company's books in 2019-20, despite having access to the details of an investigation that was ordered following the death of the company's

Coffee Day Global case: NFRA imposes ban on 2 auditors, 1 audit firm

The National Financial Reporting Authority (NFRA) on Friday slapped penalties of Rs 2.15 crore on three entities, including two auditors, besides barring them for varying periods for lapses in the audit of Coffee Day Global Ltd for 2019-20. The case pertains to the diversion of funds worth Rs 3,535 crore from seven subsidiary companies of CDEL to Mysore Amalgamated Coffee Estate Ltd (MACEL). Coffee Day Global Ltd (CDGL) and MACEL are subsidiaries of the listed entity Coffee Day Enterprises Ltd (CDEL). After, markets watchdog Sebi shared its investigation report in April 2022, NFRA initiated investigations into the professional conduct of the statutory auditors of CDGL. In its order, NFRA imposed a penalty of Rs 2 crore on the audit firm ASRMP & Co and Rs 10 lakh on A S Sundaresha. Further, they have been barred for a period of four years and 10 years, respectively. The first two years of the restraint period of ASRMP & Co and the first five years of the prohibition period of ..

Audit regulator NFRA imposes 1-year ban, slaps fine on auditor for lapses

Audit regulator the National Financial Reporting Authority (NFRA) has slapped a fine of Rs 1 lakh and a one-year ban on an auditor for alleged professional misconduct in the audit of Anshu's Clothing Ltd for 2015-16. During FY2015-16, Anshu's Clothing's, now known as Aditri Gems & Jewels Ltd, shares were listed on BSE and Metropolitan Stock Exchange. In its order on Thursday, the regulator said it had levied a fine of Rs 1 lakh on Sachin Kansal. He is the proprietor of S Kansal & Associates and statutory auditor of Anshu Clothing for 2015-16. Besides, Sachin was also prohibited for one year from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate during the debarment period, it added. The order came after NFRA received information from the Ministry of Corporate Affairs (MCA) regarding irregularities observed in the financial statements of the company by the Financial Reporting Review Board .

Auditors must follow process, auditing must not be ticking exercise: NFRA

Audit regulator NFRA's chief Ajay Bhushan Prasad Pandey on Friday said auditors should follow the due process and auditing should not be just a "ticking" exercise. Highlighting the importance of financial reporting, he said that audit documentation should speak for themselves. "Audit should not be just ticking audit... It should be thinking audit," Pandey said. The National Financial Reporting Authority (NFRA) chief also said that trust in the reporting system is very important. He was speaking at a conference here organised by industry body Assocham.

Resignation does not absolve Auditor of onus of reporting fraud: NFRA

The NFRA in a circular has said that it has noticed that auditors are not fulfilling their statutory responsibilities relating to reporting of fraud as required by the Companies Law

NFRA imposes five-year ban, Rs 5 lakh penalty on auditor for lapses

The National Financial Reporting Authority (NFRA) on Friday slapped a fine of Rs 5 lakh and a five-year ban on Rakesh Puri for alleged professional misconduct in connection with the audit of Sun and Shine Worldwide Ltd (SSWL) for the financial years 2012-13 and 2013-14. SSWL, now known as Johnson Pharmacare Ltd, is a BSE-listed company and was dealing in commodity futures trading during period of audit assessed by the regulator. In its order, NFRA levied a fine of Rs 5 lakh on the auditor Rakesh Puri, a partner of Y.D. & Company. Besides, Puri has been debarred for a period of five years from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate during the ban period. The regulator received information from Sebi pertaining to overstatement in reporting of sales and purchase figures to the tune of Rs 1,417 crore in the financial statements of SSWL for 2012-13 and 2013-14. Accordingly, an ...

NFRA examines ICAI proposals on accounting standard for insurance contracts

The National Financial Reporting Authority (NFRA) has discussed the ICAI proposals on a new Standard (Ind AS) for the accounting of insurance contracts. The audit regulator received these proposals from the Institute of Chartered Accountants of India (ICAI). NFRA will share its recommendations with the Ministry of Corporate Affairs (MCA), after which Ind AS 117 has to be considered and notified by the central government under the Companies (Indian Accounting Standards) rules 2015. When notified, it will replace the current notified Ind AS 104, insurance contracts, according to an official release. IFRS 17, originally issued by the International Accounting Standards Board (IASB), in May 2017, is a complete overhaul of the accounting for the insurance industry. It is specifically designed to capture the unique features of the insurance and investment contracts of the insurance entities. "This standard will enable the Indian insurance industry to present globally comparable financia

NFRA imposes fine, debars auditors for 3 yrs for professional misconduct

The National Financial Reporting Authority (NFRA) has imposed a fine and a three-year ban on two auditors for professional misconduct and other lapses in connection with the audit of SRS Ltd in 2017-18. In two separate orders, NFRA slapped a fine of Rs 3 lakh each on auditors -- Pankaj Kumar and Naresh Kumar, and debarred them for three years from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate during the ban period. The order came after NFRA received a letter from the Serious Fraud Investigation Office (SFIO) which had investigated the affairs of SRS Ltd and the group companies. An investigation by SFIO had revealed that the company and its group companies had presented financial statements containing false statements of debtors and indulged in the malpractice of round-tripping and layering of transactions resulting in inflated purchases and sales. The NFRA initiated action under the Compan

NFRA, life insurance players discuss proposed changes in Ind AS 117

The National Financial Reporting Authority (NFRA) has held an interaction with members of the life insurance industry to discuss the proposed changes in Ind AS 117 -- accounting standard for insurance contracts. Ind AS 117 is based on high quality global standard IFRS 17, insurance contracts issued by the IASB (International Accounting Standard Board) of IFRS foundation. It is going to help investors and others to better understand insurers' risk exposure, profitability and financial position. Ind AS 117 is specifically designed to capture the unique features of the insurance and investment contracts of the insurance entities, according to an official release. "Given the importance of the insurance sector, it was important to appreciate the practices and standards followed by the industry and the expected benefits of their convergence with international standards and best practices," Ajay Bhushan Pandey, Chairperson, NFRA, said. Further, the discussions were also held with ...

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NFRA to carry out conduct audit quality inspections of Big 4 network firms

The National Financial Reporting Authority (NFRA) will carry out audit quality inspections of five audit firms, including the network entities of the Big 4, and the onsite inspections are expected to be done next month, according to a top official. "Audit quality inspections will be mutually beneficial for the audit firms as well as NFRA. It will help an independent regulator like NFRA to get feedback and also help in overall improvement of the audit profession," the watchdog's Chairperson Ajay Bhushan Prasad Pandey told PTI in an interview. To begin with, he said the regulator "will carry out inspections of five audit firms, the Big 4 network firms -- Deloitte, Haskins & Sells LLP, BSR & Co LLP, SRBC & Co LLP and Price Waterhouse Chartered Accountants LLP -- and Walker Chandiok & Co LLP". BSR & Co LLP and SRBC & Co LLP are the network firms of KPMG and EY, respectively. PwC, Deloitte, EY and KPMG are the four major global entities in the auditing space and ...

NFRA aligning to global standards but industry awaits more clarity

Experts want the authority to set some limit on the time it would spend on on-site visits

Debt-ridden IL&FS statutory auditor SRBC & Co resigns

Debt-ridden Infrastructure Leasing & Financial Services (IL&FS) has said its statutory auditor SRBC & Co has resigned with effect from September 28, 2021. "M/s SRBC and Co. LLP will be ineligible to continue as auditors of the Company for the financial year 2021-22 beyond September 30, 2021 having completed audits for three years," IL&FS said in a stock exchange filing. The National Financial Reporting Authority (NFRA) had earlier found serious lapses in the statutory audit of IL&FS Transportation Networks Ltd (ITNL), a subsidiary of IL&FS, for the 2017-18 fiscal, including that the company's losses were understated by at least Rs 2,021 crore. The statutory audit was conducted by SRBC & Co LLP. IL&FS further said the company has approved the appointment of CNK Associates LLP as statutory auditor for FY 2021-22. SRBC, in a statement, said it was appointed as the statutory auditor of IL&FS in September 2017 and has already served for a continuous ...

NFRA to hold talks with Corp Affairs Ministry about raising no. of members

Seeks to increase strength from 12 to 15-18 in order to build its regulatory capacity

NFRA says appointment of DHS as statutory auditor in 2017-18 'illegal'

The National Financial Reporting Authority (NFRA) has said that appointment of Deloitte Haskins and Sells LLP as the statutory auditor of IL&FS Financial Services Ltd (IFIN) for 2017-18 was "illegal". The latest conclusions are part of the Supplementary Audit Quality Review Report (SAQRR) dated December 7, 2020. The watchdog conducted an Audit Quality Review (AQR) of the statutory audit of IFIN for 2017-18 period. The AQR Report was issued on December 12, 2019. The SAQRR covers issues which were not covered in the AQR Report. According to the SAQRR, the appointment of Deloitte Haskins and Sells LLP (DHS) as the statutory auditor of IFIN for the year 2017-18 was "illegal", since the entity was not eligible to be appointed as an auditor due to violations. Those are "subsisting business relationships on the date of appointment" and "provision of non-audit services directly or indirectly" of the Companies Act, 2013. The watchdog said that DHS failed to comply with the requirements of .

Auditors seek fine-tuning audit report guidelines, approach Sebi, NFRA

The new disclosures and assessments are a part of the Companies (Auditor's Report) order, or CARO, effective this financial year

NFRA to serve notice on Deloitte in IL&FS Financial Services case

NFRA would seek Deloitte's response on its findings soon

PW India won't offer non-audit service to clients governed by NFRA

These are services such as tax advisory and consulting