NFRA Cracks Whip On Audit Firms For Deficiencies

The audit watchdog has imposed a penalty of ₹100,000 each in the case of four partners of a Kerala-based audit firm that performed the statutory audit of branches of Dewan Housing Finance Corp. Ltd for the financial year 2017-18, the orders issued by NFRA showed.

In addition to the monetary penalties, the partners have also been debarred for one year from auditing financial statements or doing internal audits of any company, showed the orders. Besides audit deficiencies, the regulator also alleged the auditors of abdicating responsibility, resulting in professional misconduct.

The audit deficiency detected by NFRA pertains to a period prior to the non-bank lender’s acquisition by the Piramal Group as part of a debt resolution plan.In January 2021, 94% of the creditors of DHFL had voted in favour of a resolution plan by the Piramal Group and the deal was cleared by the RBI, the Competition Commission of India and the National Company Law Tribunal. An email sent to the Piramal Group on Friday remained unanswered but industry executives said the Group has nothing to do with events prior to the DHFL deal. NFRA has also taken disciplinary action against the auditors of Coffee Day Enterprises Ltd.