NFRA Sums Up Mandatory Audit Procedures Under SAs for Verifying Revenue, While Penalizing & Debarring Auditor for Lapses
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 24 February, 2024
Latest from Taxmann
The National Financial Reporting Authority (NFRA) initiated action under section 132 (4) of Companies Act 2013 against CA for professional or other misconduct in the statutory audit. This was following to the information received from Securities Exchange Board of India (SEBI) that the Financial Statements did not present a true and fair view as the company did not recognise the full interest cost on its Borrowings from banks, which were classified as Non-Performing Assets (NPA) by those banks.
The Financial Statements of company were materially misstated due to partial recognition of interest cost on Borrowings classified as NP As by the Banks and non-recognition of interest cost resulting in under-statement of losses which were approximately 30% to 173% of the reported losses. The EP instead of issuing modified opinion, issued unmodified opinion and referred the matter in an Emphasis of Matter which is in contravention of SA 706.
Based on NFRA’s investigation and proceedings under section 132 (4) of the Companies Act and after giving him opportunity to present his case, NFRA found the EP guilty of professional misconduct and order a monetary penalty of Rs. 3,00,000/- (Rupees Three Lakhs only). In addition, the EP is debarred for 2 years (Two years) 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.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
