NFRA slapped a penalty of Rs 20 lakh on CA & 10 year debarment for professional misconduct
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NFRA had recently imposed a penalty of Rs 50 lakh on a CA for professional misconduct which led to business service provider Quess Corp claiming undue income tax deduction of almost Rs 971 crore over three years.
NFRA took up a suo motu investigation into the role of the statutory auditors of Seya Industries Limited after receipt of a letter dated March 28, 2023, from SEBI about non-compliance with the accounting standards and misreporting in the financial statements by the company, and non-cooperation by the auditor.
SEBI had observed that the company had inflated its purchase and sales in the FYs 2018-19 to 2020-21, did not disclose related party relationships and their transactions, and siphoned off funds through undisclosed related parties, NFRA said. SEBI also noted that the company did not provide for interest costs on NPA loan.
Pointing out the lapses in the audit of SRS Infrastructure, NFRA said that the auditor failed to evaluate management’s assessment of the entity’s ability to continue as a going concern and also to obtain appropriate evidence related to revenue recognition.
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