Auditing

The National Financial Reporting Authority (NFRA) has highlighted significant shortcomings in the audit practices of BSR & Co LLP, a KPMG sub-licensee, particularly in related party transactions. The audit regulator's inspection was conducted in August 2024, which reviewed three BSR audit engagements from the FY ending March 2022 and March 2023. In a 13-page inspection report, NFRA found lapses related to auditing standards and compliance with the Companies Act 2013. Among the critical observations were deficiencies in verifying related party transactions. The inspection report also revealed a complex series of transactions initiated by an unnamed company, involving its promoter entity. NFRA noted that the company raised Rs 550 crore through non-convertible debentures (NCDs) and invested Rs 650 crore in compulsorily convertible preference shares (CCPS) of the promoter entity. This transaction was reportedly used to facilitate debt repayment by the promoter entity. NFRA also ...

Aligning India's auditing with global standards will help boost investors' confidence, attract more funds and ensure greater credibility to the financial data, National Financial Reporting Authority's chief Ajay Bhushan Prasad Pandey has said. He also asserted that the country cannot have "inferior standards" when the pursuit is to become a "Viksit Bharat". NFRA was constituted under the company's law in October 2018. The watchdog has passed more than 80 orders. In a recent interview, Pandey told PTI that there are certain gaps in existing auditing standards and that internationally, many standards were updated to address loopholes that had led to various scams. "In India, we are yet to update the standards in various areas. In the last 20 years, many of these standards are there in most parts of the world. We want to become Viksit Bharat, and our standards should also be aligned with global standards. We cannot have inferior standards," the NFRA Chairperson said. According to him

Auditing of companies have improved in the last three to four years, NFRA chief Ajay Bhushan Prasad Pandey has said and highlighted the need for board as well as audit committee members to engage with auditors which will help in raising red flags and prevent possible corporate failures. The National Financial Reporting Authority, constituted in October 2018 under the companies law, has passed more than 80 orders, including in Cafe Coffee Day, DHFL and a few other large cases, for lapses that led to corporate failures. At the helm of the watchdog for more than two years, Pandey told PTI in an interview that many of the auditors were doing and are doing a good job. "Overall, auditing of companies has improved over the last 3-4 years," the NFRA Chairperson said. However, he noted that there is a certain section among the auditors and among the board members who were not that sensitive and alert due to which there have been many corporate failures. "People should be aware that these ar

Experts noted that while specific standards on auditing exist for companies, such standards are yet to be notified for LLPs

The criteria may include mandatory completion of Forensic Standards Course and ICAI membership

Lok Sabha Speaker Om Birla on Saturday said a robust and transparent audit system helps strengthen democracy and takes the country on the path of all-round development. Addressing an 'Audit Diwas' event of the Comptroller and Auditor General (CAG) here, he asserted that a strong and transparent audit brings fiscal discipline and monetary prudence which ensures that funds passed by Parliament for various schemes are utilised appropriately. Birla also underlined that to ensure fiscal discipline and transparency in Indian democracy, a senior member of the principal opposition party is conventionally appointed as head of Parliament's Public Accounts Committee (PAC). "This is the strength of Indian democracy," he asserted, noting that the audit report of CAG on public money spent is scrutinised by the Public Accounts Committee (PAC) where members from both sides share their views on paragraphs of audit reports. Addressing the gathering, Birla said enhanced transparency in the audit ushe

The meeting will be attended by representatives of the Institute of Chartered Accountants of India (ICAI), which had earlier drafted a Guidance Note on financial statements of LLPs

Sources said that the regulator could soon notify the new standards for select entities

NFRA Chairperson Ajay Bhushan Prasad Pandey on Tuesday said the regulator's efforts are to incorporate best global standards, which are required for the country to have big homegrown accounting and auditing firms. Amid NFRA and chartered accountants' apex body ICAI having differences over proposed changes to an accounting standard related to group audits, Pandey also flagged that there have been a series of corporate failures in the country and emphasised the need for high-quality reporting and auditing frameworks. Speaking at a webinar on 'Risk-Based Approach of ISQM-1: Building High Quality Audit Firms', Pandey said the desire is to incorporate best global standards. "We cannot create global audit firms without adhering to global standards," he added. ISQM refers to International Standard on Quality Management. He also said there has been a series of corporate failures in the last ten years and the amount involved is around Rs 2 lakh crore, he noted. The National Financial Repo

Underscoring the importance of timelines in auditing public finance, President Droupadi Murmu on Tuesday said if a wrong is pointed out well within time, it can be corrected and help save huge amount of public money. She emphasised the need for audit bodies keeping pace with technological evolution in order to be able to perform its oversight functions effectively as more and more public services are being delivered using technology. "What is equally important for effective auditing of public finances is timeliness. If a wrong is pointed out well within time, it can be corrected," she said while addressing the 16th Assembly of Asian Organization of Supreme Audit Institutions (ASOSAI) here. This implies that an auditor is entrusted with the task of not only pointing out faults but also suggesting a way out to improve the quality of governance, she said. The mandate of public sector audits has expanded beyond traditional auditing to include assessing the effectiveness of public welfa

The revised standards hold that the group auditor is ultimately responsible for the audit

The senior official said that ICAI is not opposed to implementing the revised ISA 600 but is trying to figure out the path to do so. ICAI would be taking up this issue in its next council meeting

The NTSB's Homendy added there was no guarantee the door panel issue would not occur again

The government on Monday said all airport operators have been directed to carry out a third party audit of structural stability of airport buildings and associated infrastructure. Besides, they will conduct a thorough evaluation of all civil, electrical and technical aspects of the buildings before the onset of monsoon every year. The directives came in the wake of roof collapse incidents at three airports last month. During heavy rain, forecourt canopy collapsed at Terminal 1D of the Delhi airport on June 28. Also, the kerb area canopy made of tensile fabric, a non-structural element, was damaged at Jabalpur and Rajkot airports on June 27 and 29, respectively. In 2023-24, an amount of Rs 795.72 crore has been spent on Repair and Maintenance (R&M) works at 121 airports of the Airports Authority of India (AAI), as per official data submitted to the Rajya Sabha on Monday. Meanwhile, Civil Aviation Minister K Rammohan Naidu told the Upper House that the ministry has constituted a ...

The private sector lender has also beefed up internal teams to fix issues and tone up the working of the systems

The Standard on Auditing (SA) 570 requires the auditor to obtain sufficient appropriate audit evidence that a company is a going concern and will continue its operations for the foreseeable future

Next year, NFRA will shortlist 12 firms for inspection and in the next 4-5 years it plans to inspect 20-30 firms every year

While there is disappointment with the order, there is also hope that it would eventually lead to "much needed" clarity on guidelines on international networking for domestic firms

The National Financial Reporting Authority (NFRA) has slapped penalties totalling Rs 4.5 crore on an audit firm and two auditors for professional misconduct for alleged auditing lapses of Reliance Capital's financials in 2018-19. A fine of Rs 3 crore has been imposed on Pathak H D & Associates, Rs 1 crore on Parimal Kumar Jha and Rs 50 lakh on Vishal D Shah. Besides, Jha and Shah have been debarred from taking up audit work for 10 years and 5 years, respectively, according to an order. Jha was the Engagement Partner (EP) and Shah was the Engagement Quality Control Review (EQCR) Partner for the statutory audit of Reliance Capital for 2018-19 fiscal. For 2018-19, the company was jointly audited by Price Waterhouse & Co LLP (PW) and Pathak HD & Associates. PW reported suspected fraud regarding loans and investments amounting to approximately Rs 12,571 crore to some group companies. In the order dated April 12, the NFRA said that despite the reporting of suspected fraud and ...

Comptroller and Auditor General of India (CAG) Girish Chandra Murmu on Friday said that the objectives of the audit are not merely to find out the deviations, non-compliance and fault finding in lawful decision-making but to promote efficiency and effectiveness also. Speaking at the SRCC Business Conclave here, the CAG said different types of audit are taken up against the extant policies, rules, and standards prevalent at the time of audit. Murmu stated that accountability, transparency, efficiency and effectiveness are assertions that are tested in audit. Such independent checks on the functioning of the government provide credibility to the executive and confidence to the public at large, he said, and added securing accountability of the government protects its fiscal stability and its image globally. "Although accountability does not start and end with audit, it emphasises the need to fix responsibility for healthy governance. Different types of audits, as mentioned, promote ..