Key word:- NFRA,AUDIT, MISCONDUCT, PENALTY
The National Financial Reporting Authority (NFRA) has slapped a penalty of Rs 5 lakh on an auditor for professional misconduct and other lapses in the audit of Sobha Ltd for 2017-18 and 2018-19.
The order came after NFRA received information from the Securities and Exchange Board of India (Sebi) vide a letter dated May 2021 against Sachdev for professional and other misconduct.
In its investigation, NFRA found that the auditor did not comply with the provisions of standards on auditing (SA) as he failed to report on the uncertainty about the recovery of unsecured land advances amounting to Rs 1,843.13 crore.
The auditor (Sachdev) also failed to report the matter even after identifying the weakness in the internal controls.
Sachdev did not report the lack of provisioning against the amounts owed by certain individuals and security deposits given to others, despite being aware that these transactions were under investigation by SEBI.
Notably, Sachdev did not address the concerns raised by SEBI in its Independent Auditor’s Report for the fiscal year 2019, either through qualification or the Emphasis of Matter.
This penalty underscores the importance of adhering to auditing standards and promptly reporting any irregularities or uncertainties in financial audits.
NAME-AAYUSH KUMAR JAISWAL, SEMESTER -3RD, UNDER THE INTERN LEGAL VIDHIYA., GURU GHASIDAS UNIVERSITY.
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