AUDIT REGULATOR NFRA
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.
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.
NFRA imposes Rs 2.5 crore fine on two auditors in Reliance Commercial Finance case
The National Financial Reporting Authority (NFRA) has penalized two auditors with fines totaling Rs 2.5 crore for professional misconduct and auditing lapses in the Reliance Commercial Finance case for FY2018-19. It imposed a Rs 2 crore fine on Shridhar & Associates and Rs 50 lakh on Ajay Vastani, along with a 5-year ban on Vastani from undertaking audits. The penalties were issued following a report of suspected fraud and inadequate audit procedures by the auditors.
NFRA penalises 3 auditors in Reliance Home Finance case
NFRA penalizes audit firm and auditors Rs 1.6 crore for Reliance Home Finance audit misconduct. Issues with risk assessment, fraud suspicion, and compliance highlighted. Lack of quality standards and objective review mentioned.
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.
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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.
Financial reporting community needs to learn from India’s start-up success story, says NFRA chairman
“India ranks third globally in terms of the number of start-ups that are becoming unicorns. We all should collectively think if we can do the same thing in the auditing community,” Pandey said in his closing remarks. Pandey noted that NFRA would coordinate with the Ministry of Corporate Affairs to help create enabling frameworks for establishing home-grown audit firms like the Big Four.
NFRA changes tack, ramps up focus on supervision to boost audit ecosystem: Chairman AB Pandey
The National Financial Reporting Authority (NFRA) in India has shifted its approach from a predominantly enforcement-driven regulator to one with a judicious approach towards both enforcement and supervision, according to its Chairman Ajay Bhushan Pandey. He highlighted new initiatives, including firm-wide audit quality inspections and engagement with audit panels, independent directors, and boards of listed companies.
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.
NFRA debars auditor for lapses in books of Maharashtra-based Bilcare
The National Financial Reporting Authority (NFRA) has debarred auditor Ratan Laxminarayan Rathi of RL Rathi & Co for two years and imposed a penalty of Rs 3 lakh for professional misconduct in the audit of Bilcare. The financial statements of Bilcare were misstated due to interest cost recognition. Sebi reported the lapses.
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 to engage with audit panels of big companies to curb frauds
The National Financial Reporting Authority (NFRA) is planning to directly engage audit committees of large listed companies to sensitise them about accounting standards and their role, a first-of-its kind regulatory outreach to curb corporate frauds, people aware of the watchdog's thinking told ET.
NFRA bans 2 entities for professional misconduct in Seya Industries matter
The National Financial Reporting Authority (NFRA) has imposed a fine of Rs 20 lakh on an auditor and barred him for 10 years for professional misconduct in the matter of Seya Industries Ltd.
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.
Audit regulator NFRA slaps Rs 50 lakh penalty on chartered accountant for lapses
Highest penalty of Rs 50 lakh in recent years was slapped by NFRA on a chartered accountant for professional misconduct that enabled business services provider Quess Corp to claim undue income tax deduction of almost Rs 971 crore over three years. Subsequently, NFRA looked into the professional conduct of the chartered accountants and their firms involved in the certifications that formed the basis of the income tax deduction claims.
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.
NFRA finds certain lapses in audit quality of network entities of Big 4
The inspections of the audit firms were started in December last year and covered various aspects, including review of firm-wide quality controls evaluate their adherence to Standards on Quality Control (SQC-1) and selected audit documentation of the annual statutory audit of financial statements for the year ended March 31, 2021, according to four separate reports released by NFRA on Friday.
NFRA bans two auditors for up to 10 years for lapses in DHFL’s FY18 audits
In two separate orders, made public on Wednesday, the regulator has banned Jignesh Mehta for taking up audits for 10 years and Amit Vinay Chaturvedi for five years. A penalty of Rs 5 lakh has also been imposed on each of them. These are among the severest punishments, extended by the NFRA, to scores of DHFL auditors in various cases of misconduct.
NCLAT upholds NFRA penalty on DHFL auditors
The National Company Law Appellate Tribunal has upheld the penalty imposed by the National Financial Reporting Authority (NFRA) on auditors of Dewan Housing Finance Corporation Ltd (DHFL). The NFRA had fined 18 DHFL auditors Rs 1 lakh each, with 14 of them being barred from practicing for six months to a year. The auditors were found guilty of misconduct during branch audits and were blamed for failing to detect fraud at DHFL.
Congress raises report on Adani Group's auditor facing NFRA scrutiny, Group says all compliance met with
Senior Congress leader Jairam Ramesh has criticized the Adani Group, stating that there is something wrong with the conglomerate. This comes after a report by Bloomberg revealed that one of Adani's auditors is being investigated by India's accounting regulator. Ramesh highlighted a series of events, including auditors resigning and concerns flagged about financial transactions.
Adani auditor EY faces inquiry by India’s accounting regulator
The National Financial Reporting Authority (NFRA) in India has launched an inquiry into EY member firm S.R. Batliboi, one of the longtime auditors of the Adani Group, according to sources. NFRA has requested files and communications related to the audits of Adani Group companies dating back to 2014. It is unclear how long the inquiry will take or what consequences it may have.
NFRA penalises auditor for lapses in Sobha audit case
The National Financial Reporting Authority (NFRA) has fined an auditor, Supreet Sachdev of BSR & Co LLP, Rs 5 lakh for professional misconduct and other lapses in the audit of Sobha Ltd for the fiscal years 2017-18 and 2018-19. The penalty was imposed after NFRA received information from the Securities and Exchange Board of India (Sebi) regarding Sachdev's misconduct.
NFRA levies Rs 15 lakh fine on two auditors for lapses in Lexus Granito India audit
In its order on Wednesday, the regulator found that Lexus Granito India Ltd (LGIL) had unilaterally written back substantial amounts of its liabilities and treated them as other income, which resulted in overstatement of profits by Rs 2.31 crore in 2017-18, and an understatement of losses by Rs 5.89 crore in 2018-19 and Rs 3.15 crore in 2019-20.
NFRA slaps 1-year ban, imposes fine on auditor for lapses in SRS Ltd audit
In its order, the audit regulator slapped a fine of Rs 1 lakh on Apoorve Bansal of SVP & Associates, who was the Engagement Quality Control (EQC) reviewer for the statutory audit of SRS Ltd. Besides, Bansal was also debarred 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, the regulator said in an order on Tuesday.
Regulators want effective communication between auditors and audit committees of firms to curb corporate frauds
The regulators like NFRA and Sebi may tighten vigil around the need for the "effective two-way communication process" soon, they said. At present, auditors in many cases are found to give a last-minute report/presentation to the audit committee of a company, consisting mainly of independent directors, just before the board is about to approve its financial statement, one of the persons said. "So, the auditor's report isn't scrutinised properly by the audit committee. Also, there is no effective two-way communication process, as required," he added.
NFRA may approach SC over power to probe pre 2018 cases
NFRA has already barred some auditors allegedly involved in the IL&FS crisis from undertaking fresh work, in addition to imposing fines on them, but its orders have been challenged by them at the Delhi high courts. In fact, the aggrieved auditors have challenged the vires of Section 132 (4) of the Companies Act, 2013, and the relevant rules that empower NFRA to investigate professional lapses by auditors.
Coffee Day Global case: NFRA slaps Rs 2.15 cr fine, imposes ban on 2 auditors, 1 audit firm
In its probe, NFRA found that the auditors (ASRMP & Co, Sundaresha and Madhusudan) failed to exercise professional judgement and scepticism during the audit of CDGL where there was fraudulent diversion of funds to MACEL worth Rs 1,105.10 crore and evergreening of loans through structured circulation of funds among other group companies.
When facing problems, cos should also look at strengthening audit committees, independent directors: NFRA chief
When companies are facing problems, they should also look at strengthening their audit committees and empowering independent directors, NFRA chief Ajay Bhushan Prasad Pandey said on Friday as he mentioned about the trend of companies setting up advisory boards for governance
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