AUDITING AND ACCOUNTING STANDARDS
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.
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.
Faced with RBI audit, IIFL Finance delays Board meet for earnings release
IIFL Finance extends announcement of quarterly earnings beyond May 30 due to RBI audit, anticipates releasing results by June 30.
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.
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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.
Donald Trump may owe $100 million from double-dip tax breaks, audit shows
The New York Times and ProPublica revealed that Donald Trump employed a questionable accounting tactic to claim improper tax breaks on his Chicago tower, facing a potential $100 million+ tax bill. In recent months, Trump has also been ordered to pay $83.3 million in a defamation case and an additional $454 million in a civil fraud case brought by New York Attorney General Letitia James.
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.
KPMG, Deloitte affiliates hit with US penalties for exam cheating
Exam cheating has plagued the auditor industry for years. KPMG in 2019 agreed to pay $50 million to the U.S. Securities and Exchange Commission (SEC) for a series of violations
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.
Global audit framework for local bodies in the works: CAG
Apex auditors, including India's Comptroller and Auditor General (CAG) Girish Chandra Murmu, are developing an international framework for auditing regional and municipal bodies to assess their performance. India aims to host a conference in September to deliberate on a preliminary draft of auditing standards for such entities.
Report on audit at Byju's soon: ICAI Chief
The Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI) is finalizing its report on the standards and processes followed by the auditor of Byju's, a prominent edtech company. Ranjeet Kumar Agarwal, the new President of ICAI, stated that the report will be the basis for the institute's next steps regarding the matter. The crisis at Byju's emerged following the resignation of three directors and its auditor, Deloitte, due to delays in announcing financial results.
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.
Paytm crisis: RBI has sown scepticism among payment cos & it may want to reconsider its position
Central banks are meant to ensure that regulated entities are financially sound and operationally secure. To this end, they must be as diligent in monitoring as swift in exercising punitive action; transparent with all stakeholders, including the public; and ensure they maintain market stability at all costs. In the case of PPB, RBI may have fallen a little short.
Budget 2024: Sitharaman may ramp up efforts to boost consumption demand, rural economy
Budget 2024: Finance Minister Nirmala Sitharaman is set to present her sixth consecutive Budget with the focus on infusing more funds into the public's hands. Potential adjustments to tax slabs or an increase in standard deductions may be implemented. The budget may also allocate more funds for the rural employment guarantee scheme MGNREGA and offer higher payouts for farmers. Women and marginalised communities are likely to receive additional benefits to boost consumption before the general elections.
A small entity like UCB too can be systemically important, says RBI
RBI deputy governor Swaminathan J countered the notion that a small entity like an Urban cooperative Bank (UCB) is not systemically important. He underscored the importance of governance standards and the inter-connectedness of financial entities. Even a small disturbance can have far-reaching effects and erode public trust. The failure of UCBs in the past highlights the contagion risks posed by smaller banks. UCBs play a critical role in the financial system, serving various sectors of society. Transparent decision-making, accountability, and adherence to best practices are crucial.
View: ICAI must play a positive role by rolling out a standard PMLA solution
Cost of compliance for small practitioners can be onerous, especially compared to revenue earned by such practitioners. Therefore, they may have to choose between additional cost and not doing such activities. If the latter, it will narrow the scope of work for CAs operating in tier-2 and -3 cities and niche players, leading to a loss in revenue. Also, if such services are not offered in these places, a large category of clients, including MSMEs and HNIs, may find it challenging to get them from other clients.
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 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.
Big Four network and others under scrutiny over audit services
The National Financial Reporting Authority (NFRA) is investigating audit and non-audit services provided by the Big Four and other firms to clients. NFRA has raised concerns about conflict of interest and independence issues, leading to disciplinary actions. Violations include exceeding the revenue limit for non-audit services and breaching the cap on revenue from a single client.
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.
VCs double check corporate governance as lapses rise
Multiple top-tier founders and investors said investors are bringing in stricter terms in shareholding agreements as well as term sheets and that's delaying the overall timeline for investments to close by several months in a number of instances.
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 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.
Peer review of auditors of large unlisted firms must from April
The Institute of Chartered Accountants of India (ICAI) will make the peer review mechanism mandatory for the auditors of large unlisted firms from April 2024, as it has decided to merge the second and third phases of the implementations of this framework, its president Aniket Sunil Talati told ET.
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