National Financial Reporting Authority

NFRA board to meet next week: Adoption of new audit rules on agenda

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

Market regulator Sebi directs Embassy Reit to suspend CEO Aravind Maiya

Action after NFRA debarred Maiya for 10 years in a probe related to Coffee Day

ICAI calls for a pause in audit standards revision process by NFRA

The difference of opinion between ICAI and NFRA on the revision of auditing standards in India has come to the fore once again

ISA 600 dispute: NFRA, ICAI can find common ground, says official

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

NFRA imposes Rs 2.5 cr fine on two auditors in Reliance Commercial Fin case

The National Financial Reporting Authority (NFRA) has slapped penalties totalling Rs 2.5 crore on two auditors for professional misconduct and auditing lapses in the Reliance Commercial Finance case for FY2018-19. The audit regulator imposed a fine of Rs 2 crore on Shridhar & Associates and Rs 50 lakh on Ajay Vastani. In addition, the regulator also barred Vastani for 5 years from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate. The order came after the corporate affairs ministry informed NFRA that Price Waterhouse & Co Chartered Accountants LLP (PW) had filed a report to the ministry under the Companies Act, 2013. Thereafter, PW resigned as the auditor of RCFL, without issuing an audit report for FY 2018-19. Further, Shridhar & Associates was appointed by the board of directors of RCFL in June 2019 as the statutory auditor of the company. On examination of the audit file of RCFL ...

NFRA slaps fine of Rs 4.5 cr on auditors for Reliance Capital audit lapses

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 ...

Auditors must do basic groundwork, not rely too much on AI: NFRA Chairman

If one reads the Companies Act, Code of Ethics, and Standards of Audit and Quality Control in a harmonious manner, then one would not have any confusion about definition of non-audit services, he said

NFRA finds certain lapses in audit quality of Walker Chandiok - Co

The National Financial Reporting Authority (NFRA) on Friday found certain lapses in the auditing-related activities of audit firm Walker Chandiok & Co LLP during detailed audit quality inspections. The regulator initiated an audit quality inspection of Walker Chandiok & Co LLP in December last year and covered various aspects, including a review of firm-wide quality controls to evaluate their adherence to Standards on Quality Control (SQC-1) and review of selected audit documentation of the annual statutory audit of financial statements for the year ended March 31, 2021, as per the order. The regulator has flagged several deficiencies, where the audit firm failed to adhere to some of the prescribed 'client acceptance and continuance' prerequisites, including verifying the client's integrity and recording the resolution of concerns. NFRA observed that there was a discrepancy between the disclosures made by Walker Chandiok & Co LLP (WCCL) and Grant Thornton Bharat LLP (GTBL)

DHFL branch audits: NFRA penalises 18 auditors, debars them for 6-12 months

The National Financial Reporting Authority (NFRA) has imposed penalties on 18 auditors and also debarred them for varying periods for lapses with respect to audits of various branches of housing finance company DHFL. Penalties totalling Rs 18 lakh or Rs 1 lakh each has been imposed on the auditors for their professional misconduct, according to 18 separate orders passed by the regulator. Also, they have been debarred for a period of six months to one year from "being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate". Out of the 18 auditors, 4 have been debarred for 6 months and the remaining 14 auditors have been restrained for 1 year. Following media reports of alleged siphoning of public money of around Rs 31,000 crore and the Enforcement Directorate's reported action in April 2020 on an alleged banking fraud of about Rs 3,700 crore by the

Audit regulator NFRA imposes 1-year ban, slaps fine on auditor for lapses

Audit regulator the National Financial Reporting Authority (NFRA) has slapped a fine of Rs 1 lakh and a one-year ban on an auditor for alleged professional misconduct in the audit of Anshu's Clothing Ltd for 2015-16. During FY2015-16, Anshu's Clothing's, now known as Aditri Gems & Jewels Ltd, shares were listed on BSE and Metropolitan Stock Exchange. In its order on Thursday, the regulator said it had levied a fine of Rs 1 lakh on Sachin Kansal. He is the proprietor of S Kansal & Associates and statutory auditor of Anshu Clothing for 2015-16. Besides, Sachin was also prohibited for one year from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate during the debarment period, it added. The order came after NFRA received information from the Ministry of Corporate Affairs (MCA) regarding irregularities observed in the financial statements of the company by the Financial Reporting Review Board .

Auditors must follow process, auditing must not be ticking exercise: NFRA

Audit regulator NFRA's chief Ajay Bhushan Prasad Pandey on Friday said auditors should follow the due process and auditing should not be just a "ticking" exercise. Highlighting the importance of financial reporting, he said that audit documentation should speak for themselves. "Audit should not be just ticking audit... It should be thinking audit," Pandey said. The National Financial Reporting Authority (NFRA) chief also said that trust in the reporting system is very important. He was speaking at a conference here organised by industry body Assocham.

NFRA slaps Rs 1.10 cr fine, imposes ban on two auditors, one audit firm

The National Financial Reporting Authority (NFRA) has imposed a ban as well as penalties totalling Rs 1.10 crore on three entities, including two auditors, for alleged professional misconduct in connection with the audit of Giri Vidhyuth (India) Ltd for 2019-20. Giri Vidhyuth (India) Ltd (GVIL) is a subsidiary of Coffee Day Enterprises Ltd (CDEL). The case pertains to diversion of funds worth Rs 3,535 crore from seven subsidiary companies of CDEL to Mysore Amalgamated Coffee Estate Ltd (MACEL), an entity owned and controlled by the promoters of CDEL. After markets watchdog Sebi shared its investigation report in April 2022, the audit regulator started probing the professional misconduct of the auditors of GVIL. Separately, NFRA imposed a fine of Rs 1 crore on Sundaresha & Associates and slapped a two-year ban on the audit firm. This debarment period of Sundaresha will start after the completion of two years of debarment period imposed by NFRA through its order in April in the case

NFRA to carry out conduct audit quality inspections of Big 4 network firms

The National Financial Reporting Authority (NFRA) will carry out audit quality inspections of five audit firms, including the network entities of the Big 4, and the onsite inspections are expected to be done next month, according to a top official. "Audit quality inspections will be mutually beneficial for the audit firms as well as NFRA. It will help an independent regulator like NFRA to get feedback and also help in overall improvement of the audit profession," the watchdog's Chairperson Ajay Bhushan Prasad Pandey told PTI in an interview. To begin with, he said the regulator "will carry out inspections of five audit firms, the Big 4 network firms -- Deloitte, Haskins & Sells LLP, BSR & Co LLP, SRBC & Co LLP and Price Waterhouse Chartered Accountants LLP -- and Walker Chandiok & Co LLP". BSR & Co LLP and SRBC & Co LLP are the network firms of KPMG and EY, respectively. PwC, Deloitte, EY and KPMG are the four major global entities in the auditing space and ...

NFRA warns auditors against non-accrual of interest on NPA borrowings

Mere classification of a firm's loans as NPAs by lender banks does not relieve the borrower from its liability towards payment of interest or the principal, the authority says

Auditor resignations continue to trickle in with 15 exits since April

On average, one auditor of a listed company has prematurely resigned every two weeks this financial year; pace seems to have picked up in September with 5 departures

NFRA finds big gaps in statutory audit of IL&FS Transportation Networks

The authority has also found the auditor to be in violation of ICAI Code of Ethics 2019

Human resources & regulatory autonomy

Statutory regulatory authorities need autonomy in staffing their organisations with specialists who have integrity and knowledge

NFRA needs to have standalone legislation, says chief R Sridharan

Further, he noted that the statute treats the NFRA as a subordinate office of the corporate affairs ministry

NFRA bans former Deloitte India partner for 7 years due to IL&FS case

Authority says independence of the statutory auditor in mind and appearance was totally compromised, accuses Udayan Sen of intentional reckless behaviour

After long wait, National Financial Reporting Authority gets own address

After camping in make-shift offices, it shifted to a upmarket central Delhi building just a few months ago that was previously the office of the Competition Commission of India