In fresh action against auditors of the erstwhile Dewan Housing Finance Corporation Ltd, the National Financial Reporting Authority (NFRA) has imposed a fine of Rs 5 lakh each and deregistered two statutory auditors for periods ranging from five years to 10 years.
In a recent order, the NFRA canceled the show cause notice issued to CA Amit Vinay Chaturvedi, partner of Chaturvedi and Shah LLP, who was the engagement quality control review partner for the entire statutory audit from the DHFL for 2017-18, and was excluded. him as an auditor, internal auditor or undertaking any audit work for a period of five years and imposed a fine of Rs 5 lakh on him.
Based on an investigation, the NFRA found him guilty of professional misconduct and failing to meet relevant requirements of the auditing standards.
In another similar order, the NFRA quashed the show cause notice issued to CA Jignesh Mehta, associate of Chaturvedi and Shah, who was the engagement partner for the statutory audit of DHFL for 2017-18, and has imposed a fine of Rs 5 lakh and debarred him for a period of 10 years.
In its order, the NFRA found the EP guilty of professional misconduct and noted that it had failed to fulfill its legal duty to carry out branch audits, which was the key requirement of the Companies Act 2013 for the completion of the audit of the company’s financial accounts. 2017-18 declarations.
The NFRA, established in 2018, is the statutory body responsible for monitoring the implementation and enforcement of auditing and accounting standards and overseeing the quality of service of the professions associated with compliance with these standards. The NFRA has the powers of a civil court.
Following media reports of alleged siphoning of public money of around Rs 31,000 crore by DHFL directors, the NFRA initiated a quality review of the audit of statutory audit of DHFL carried out in 2017-18 by Shah and Chaturvedi.
In the past also, the NFRA has issued a number of orders against DHFL auditors undertaking branch audits and other audit work.
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