More action against pre-2018 Audit Violations likely - NFRA
PrintListen to this Article
“Any doubt or confusion that may have existed among a section of the auditor community has now been removed by this judgement of NCLAT,” Pandey said, adding the regulator’s actions this year would include not only instant cases but the past cases also.
On December 3, the NCLAT held that the NFRA has “clear and required” retrospective jurisdiction over the alleged offences by chartered accountants for the period prior to formation of NFRA, which was set up in 2018.
Pandey said: “it’s a well settled law that a ‘procedural law’ is presumed to retrospective unless stated otherwise.” There are several Supreme Court judgements, pertaining to civil and criminal proceedings, which support the same principle. “That is why, right from its establishment, NFRA has been holding this view and has been covering audits which were done even prior to 2018,” he said.
The observations were made by the NCLAT as part of the ruling which upheld the NFRA’s orders against the erstwhile Dewan Housing Finance Corporation Ltd (DHFL) auditors.
In 2020, the Enforcement Directorate had reported an operation against alleged bank fraud of about Rs 3,700 crore by the promoters of DHFL, following allegations of misappropriation of public funds to the tune of approximately Rs 31,000 crore.
In reaction to the probe, NFRA had initiated an Audit Quality Review (AQR) to probe into the role of the statutory auditors of DHFL for 2017-18. During the review, NFRA found out that 33 engagement partners/branch auditors had signed the ‘Independent Branch Auditors’ Report’ for nearly 250 branches of DHFL.
The NCLAT had observed: “NFRA, as an independent audit regulator has been entrusted by the Parliament after great debate for protecting public interest including of the creditors by exercising effective oversight over accounting and auditing functions.” (Source - Business Standard)
Category : NFRA | Comments : 0 | Hits : 1327
NFRA Imposes Monetary penalty of Rs 1 Crore on M/s Dhiraj & Dheeraj, Chartered Accountants, Mumbai (Firm of Active Central Council Member of ICAI) & Rs 50 Lakhs and 10 Lakh on CA Piyush Patni (Engagement Partner) & CA Pawan Kumar Gupta (Engagement Quality control Review Partner) respectively over Audit Deficiencies in the matter of Statutory Audit of Reliance Home Finance Limited (RHFL). In addition, EP and EQCR partners are debarred for five years and three years respectively fro...
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. While the audit firm, M/s PCN & Associates, has been prohibited from taking up any audit work for two years, chartered accountant Gopala Krishna Kandula has been barred for ten years, according to a NFRA order on Friday. In another case NFRA Imposed Mon...
The National Financial Reporting Authority (NFRA) has slapped a penalty of Rs 5 lakh on an audit firm for professional misconduct and other lapses in the audit of Vikas WSP Ltd for FY20. Vikas WSP Ltd is a BSE- and NSE-listed company. The order came after NFRA received information from the Securities Exchange Board of India (Sebi), that Vikas WSP Ltd did not recognise in its FY20 financial statements the interest expense on its borrowings from banks, which resulted in overstatement of profits...
National Financial Reporting Authority (NFRA), the regulator for auditors and audit firms for listed and large companies, has acted against Pathak HD & Associates - the joint auditor for Reliance Capital, then an Anil Ambani group company - and its two auditors for multiple failures flagged by the other auditor, Price Waterhouse (PW), which resigned and also flagged suspected fraud of Rs 12,571 crore by the company. Reliance Capital was recently taken over by the Hindujas after several le...
National Financial Reporting Authority (NFRA) chief Ajay Bhushan Prasad Pandey on Wednesday said the agency will assess the feasibility of ranking auditors on qualitative parameters and auditors ranking companies on governance matters. Besides, he said, the agency responsible for assessing auditors or listed and large companies, will work with the Institute of Chartered Accountants of India and corporate affairs ministry about responsibility of auditors around fraud, which is an area of conce...
Comments