Audit Lapses: NFRA Debars Chartered Accountant [Read Order]

The audit watchdog, National Financial Reporting Authority (NFRA) on Monday de barred a chartered accountant, Som Prakash Aggarwal for lapses in the audit of Vikas WSP, a listed company that manufactures and exports guar gum powder.

Apart from three-year ban, the NFRA has also imposed a monetary fine of ₹3 lakh on the chartered accountant (CA).

The National Financial Reporting Authority is an independent regulator set up to oversee the auditing profession and accounting standards in India under the Companies Act 2013.

The development comes after NFRA received information from market regulator Securities and Exchange Board of India (Sebi) regarding potential lapses in the audit work of Som Prakash Aggarwal for 2019-20. In its investigations, NFRA found that the CA failed to report non-recognition of interest costs pertaining to borrowings of the company classified as nonperforming assets by banks.

This was important since interest cost constituted 88% of profit before tax reported by Vikas WSP. The NFRA order also said the CA failed to consider crucial provisions of Indian accounting standards while conducting statutory audit. “CA Som Prakash Aggarwal failed to conduct the audit in accordance with the SAS (standards of auditing) and applicable regulations, “the NFRA order said. He also failed “to report the material misstatements and non-compliances made by the company in the financial statements”, it said.

To Read the full text of the Order CLICK HERE

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