NFRA says appointment of Deloitte as statutory auditor in 2017-18 ILLEGAL
PrintListen to this Article
The latest conclusions are part of the Supplementary Audit Quality Review Report (SAQRR) dated December 7, 2020.
The watchdog conducted an Audit Quality Review (AQR) of the statutory audit of IFIN for 2017-18 period. The AQR Report was issued on December 12, 2019. The SAQRR covers issues which were not covered in the AQR Report.
According to the SAQRR, the appointment of Deloitte Haskins and Sells LLP (DHS) as the statutory auditor of IFIN for the year 2017-18 was "illegal", since the entity was not eligible to be appointed as an auditor due to violations. Those are "subsisting business relationships on the date of appointment" and "provision of non-audit services directly or indirectly" of the Companies Act, 2013.
The watchdog said that DHS failed to comply with the requirements of the Standards on Auditing (SAs).
"The instances of failure noticed are of such significance that it appears to NFRA that DHS did not have adequate justification for issuing the audit report asserting that the audit was conducted in accordance with SAs," as per the executive summary of the SAQRR.
There was no immediate comment from Deloitte.
IFIN is part of the diversified IL&FS group, where major financial irregularities came to light in 2018. Later, the government had superseded its board.
NFRA said there are other violations that deal with determination of materiality amounts on the basis of non-relevant factors, deficiencies in applying analytical procedures, failure to respond to subsequent events and inadequacies in auditing of creation of charges on assets mortgaged with the company, it noted.
Further, NFRA said that the Engagement Quality Control Review (EQCR) mechanism was found to be completely inadequate for the intended task.
As per the executive summary, the regulator also extensively studied the IT processes and platform that are used by DHS for their Audit File documentation.
"NFRA found that the IT processes/ platform have deficiencies that are systemic and structural in nature and arise from a complete disregard for basic principles of IT security in the software used. This makes the audit documentation completely unfit for the intended purpose," it noted. #casansaar (Source - Business Standard)
Category : NFRA | Comments : 0 | Hits : 2063
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