NFRA Slaps Rs 5 lakh Penalty on Audit Firm for lapses in Vikas WSP Audit Case
PrintListen to this Article
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 by the company.
Thereafter, NFRA initiated action against the audit firm, for professional or other misconduct in the statutory audit of Vikas WSP Ltd (VWL) for FY20.
The regulator noted that the financial statements of VWL were materially misstated due to partial recognition of interest cost on borrowings classified as Non-Performing Assets (NPAs) by banks in FY20, resulting in overstatement of profits.
"The audit firm that was primarily responsible for establishing and maintaining a system of quality control that the firm and its personnel comply with professional standards and regulatory and legal requirements.
"Further, the reports issued by the firm or engagement partners are appropriate in the circumstances, failed to properly implement its quality control policies and procedures," NFRA said in the order on Tuesday. Accordingly, the regulator penalised the audit firm for the audit lapses.
"The audit firm failed to meet relevant requirements of the Companies Act, Standards on Quality Control (SQC 12), standards on auditing in several significant respects, and was grossly negligent and failed to apply professional ske.
Category : NFRA | Comments : 0 | Hits : 215
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...
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...
The National Financial Reporting Authority (NFRA) is set to commence its inaugural annual review of major auditing organizations, including the Big Five, by April at the latest. This review will focus on evaluating their procedures and adopted standards, according to sources familiar with the regulator’s plans. The NFRA intends to assess how well these firms adhere to the recommendations issued in its December 2023 reports, where it pointed out various shortcomings in their operational ...
Comments