AUDIT FIRMS
AI seen more as an opportunity than risk: PwC's Sam Samaratunga
PwC India's risk business has seen rapid growth, with partner count set to exceed 100. Global trends like AI and climate change shape risk management strategies. Companies seek to understand and mitigate risks for long-term resilience. AI presents both opportunities and challenges for businesses.
Delhi HC empowers ICAI to hold CA firms accountable for misconduct
The Delhi High Court has declared that the Institute of Chartered Accountants of India's disciplinary body has the authority to take action for misconduct against both chartered accountant firms and individual chartered accountants. This decision is aimed at enhancing accountability and transparency within the profession. The court emphasized the necessity of strengthening disciplinary mechanisms and urged the swift notification of amendments to relevant acts.
PwC names new China head amid regulatory scrutiny
PwC said in a statement to Reuters on Wednesday that Shanghai-based Li assumed the role of chairman of PwC China and Asia Pacific with effect from July 1, taking over from Raymund Chao who retired on June 30. The firm came under the Chinese regulatory spotlight earlier this year for its role as the auditor of troubled property company China Evergrande Group.
Q-comm audits; modest Q1 for IT firms
Happy Wednesday! Due to recent hygiene lapses by quick commerce, the government has intensified surprise inspections of their warehouses. This and more in today’s ETtech Morning Dispatch.
IPO rush amid market rally boosts demand for independent directors
Amid IPO frenzy, companies race to appoint independent directors with specific skill sets crucial for growth. Women lead key committees, while former bureaucrats remain sought after. The process overlooks competencies, favoring recommendations from bankers and auditors. Specialized firms aid in identifying professionals for board roles, ensuring compliance with listing regulations.
Government working on aggregation of CA firms, accounting standards for insurance sector
Government and ICAI collaborate to boost global accounting firm presence. Efforts include setting standards for insurance sector and LLPs, and reducing the time for voluntary company closure. ICAI President plans for CA firm aggregation in the near future.
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Sebi mulls relaxing some disclosure norms for listed firms
The Securities and Exchange Board of India (SEBI) is also evaluating giving listed companies more time to publicly disclose litigations or disputes that they are involved in, it said in a consultation paper published on Wednesday.
First NFRA annual report on eight audit firms by November
The National Financial Reporting Authority (NFRA) is set to conduct its first annual inspection of eight audit firms, including the Big Five, to reveal its findings by October or November. The inspection will focus on auditors' processes and standards, revealing how NFRA plans to strengthen the country's audit and accounting ecosystem to combat corporate frauds and uphold shareholders' interests in a rapidly growing economy.
Audit panels of companies can’t escape blame by citing auditors’ failure: NFRA chief
NFRA chairman Ajay Bhushan Pandey emphasized the audit committee's responsibility in ensuring accurate financial statements, even if auditors fail in their duty. He highlighted the need for meaningful communication between audit committees and auditors, stating that it should not be a mere formality. Pandey's remarks come as the NFRA plans to engage with large listed companies to promote accounting standards and curb corporate frauds. This regulatory outreach is part of efforts to protect retail stock investors, a focus highlighted by Finance Minister Nirmala Sitharaman.
PwC in major accounting scandal? China may impose record fine on PricewaterhouseCoopers over Evergrande auditing work
China is set to impose a record fine on PricewaterhouseCoopers LLP and may suspend some of its local operations due to its involvement in a major financial fraud case with China Evergrande Group. The Ministry of Finance is expected to announce the penalties soon, with a potential fine of at least 1 billion yuan. This move comes amidst heightened scrutiny on financial risks in China, with President Xi Jinping emphasizing the need for stronger financial oversight. PwC's Chinese arm, PricewaterhouseCoopers Zhong Tian LLP, was Evergrande's auditor during the period in question and has faced challenges in other jurisdictions as well.
Some Indian ARCs are circumventing rules, says RBI's Swaminathan
RBI Deputy Governor Swaminathan J. disclosed in a recent speech that some Indian Asset Reconstruction Companies (ARCs) have been skirting regulations, aiding in the "evergreening" of distressed assets. The RBI has ramped up supervision to curb systemic risks and ensure compliance. Swaminathan urged ARC boards to prioritize assurance functions like risk management and internal audit to identify and mitigate risks effectively.
NFRA to engage with some big listed companies on audit compliance
The regulatory outreach could involve the NFRA's engagement with audit panels, independent directors, chief financial officers and others on the boards of these companies, said one of the persons. The regulator is close to finalising a framework to hold such huddles and may invite listed companies, where large public interest is involved, for such meetings, according to another person.
ICAI disciplinary panel overlooks stay to pass order against 2 partners of PwC arms
Despite a Delhi High Court stay, the Institute of Chartered Accountants of India (ICAI) has published orders penalizing two PwC affiliate partners. PwC had obtained a stay against ICAI's disciplinary action, challenging fines and membership removal. The institute's move to upload the order on its website has sparked a legal battle. This follows a similar dispute with EY affiliates. The Big Four firms are contesting ICAI's disciplinary actions, demanding an appellate tribunal be established first.
Big 4's dominance: Local companies call for level playing field
Indian auditing firms are pushing for fair competition with multinational counterparts, expressing concerns over the Big Four's increasing dominance and alleged manipulation of regulatory loopholes. The Institute of Chartered Accountants of India (ICAI) recently investigated affiliates of EY, Deloitte, PwC, and KPMG, where the firms were able to obtain court stays against disciplinary actions by the ICAI disciplinary committee after years of scrutiny, according to local rivals.
Trump Media's newly hired auditing firm was just busted by the SEC for 'massive fraud'
The Securities and Exchange Commission (SEC) charged auditing firm BF Borgers and its owner, Benjamin F. Borgers, with "massive fraud" for deliberate failures in over 1,500 audits. Despite being hired by Trump Media and Technology Group just 37 days prior, the charges are unrelated to their work for the company. The firm agreed to a $12 million fine, with Benjamin Borgers facing a $2 million fine and both agreeing to permanent suspensions from handling SEC-related matters. The SEC found that BF Borgers fabricated documentation, failed to follow accounting rules, and falsely stated that their work met audit standards.
SFIO chargesheet sparks summons on 2013 'fraud'
A court case unfolds a decade after the Winsome scam, involving Jatin Mehta's family, BLS, and fraudulent activities with UAE clients. The case includes criminal conspiracy, breach of trust, and corporate law violations.
Big six corner most of auditing business in Nifty-500 universe
According to the report, of all the companies with equity shares listed on the NSE main board, the Big 6 Indian audit firms secured 637 assignments out of 1,961. This accounted for approximately 32.48% of the total, up slightly from 32.14% the previous fiscal year. Auditor details were missing for 47 organisations. A key standout has been the strong performance of Grant Thornton and MSKA affiliates who have established themselves as strong alternatives to the Big Four firms in audit business.
ICAI charges 3 EY India affiliates with professional misconduct
The Institute of Chartered Accountants of India (ICAI) has found three EY India affiliate entities guilty of professional misconduct and reprimanded two partners for breaches of the Chartered Accountants Act. The entities were charged for their dealings with global EY network firms not regulated in India, including paying referral fees and using their names for publicity, which is against the guidelines of the Act. The order, issued on Thursday, is the first such action against a Big Four accounting firm in India.
NFRA debars auditors, imposes Rs 50 lakh penalties for lapses in Brightcom, CMIL cases
The National Financial Reporting Authority (NFRA) has barred auditors of M/s Brightcom Group for up to ten years and imposed heavy monetary penalties on them, citing professional misconduct in auditing the company between FY20 and FY22.
India presence imperative as part of worldwide expansion: CLA Global
CLA Global is among the non-Big Four professional services networks, such as RSM, Baker Tilly, HLB, Mazars and Nexia, which, driven by the significant opportunities presented by India's growing economy, are rapidly scaling up their presence in the country.
Audit fees growth lags corporate expansion in India
While the audit fee hike is marginal, the sharply increasing complexity in business operations, heightened regulatory oversight on listed companies, growing complexity in reporting requirements, and escalating talent and organisation costs every year are putting auditors in a tough spot.
RBI plans a special audit for breaches by IIFL Finance, JM Financial Products Ltd
RBI initiates special audit for IIFL Finance Ltd and JM Financial Products Ltd due to gold loan concerns. Inspection revealed deviations in gold assaying. Auction process impact customers' interests. Loan restrictions imposed by RBI.
Found gross negligence by Byju's auditors: ICAI president
ICAI found gross negligence by auditors of Byju's. FRRB will review the conduct of auditors and take appropriate action. RBI barred Paytm Payments Bank from business. Byju Raveendran was removed from the board of Byju's.
Top auditors stop offering non-audit work to clients
Top audit firms in India, including KPMG affiliate BSR & Affiliates and BDO affiliate MSKA & Associates, have stopped offering non-audit services to audit clients. This move aligns with the NFRA's strict stance on conflict-of-interest issues. EY affiliate SR Batliboi & Co is the only top firm still providing such services. This change comes amid global pressure for auditors to maintain independence and avoid conflicts of interest. The NFRA's regulations apply to Indian companies meeting certain thresholds.
Audit panel meetings of listed firms must not be reduced to a formality: NFRA chairman Ajay Bhushan Pandey
The National Financial Reporting Authority (NFRA) plans to conduct annual inspections of major audit firms to ensure compliance with standards and protect investors. The regulator will engage with audit committees and boards, expand inspections, and address issues related to financial statements and auditor independence.
Chartered accountants from UK, Canada might be allowed to practice in India: ICAI president
Once the reciprocal system is implemented, the chartered accountants from the foreign countries will have to be registered with the ICAI, which will be regulating them.
NFRA's first annual inspection of key audit firms to start by April
The regulator will also gauge the Big Five's compliance with the suggestions made in its December 2023 reports in which it had flagged deficiencies in their work processes, including on non-audit services that they provide to the same companies of which they are the statutory auditors, one of the persons said.
NFRA plans annual auditor checks
The regulator's plan comes after it released, late in December 2023, inspection reports on deficiencies in the audit processes of major firms such as BSR & Co, Deloitte Haskins & Sells, SR Batliboi & Co, Price Waterhouse Chartered Accountants LLP and Walker Chandiok & Co.
NFRA flags audit lapses by Walker Chandiok, releases inspection report
The National Financial Reporting Authority (NFRA) has issued an inspection report on audit firm Walker Chandiok & Co LLP (WCCL), highlighting lapses such as the lack of integration between electronic and paper files and the provision of non-audit services prohibited under the Companies Act, 2013. The report also highlighted the existence of related entities of WCCL, Grant Thornton Bharat LLP (GTBL), Grant Thornton Advisory Private Ltd (GTAPL) which are part of a large global "GTIL Network" as per the standard on Quality Control (SQC) 1.
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