The National Financial Reporting Authority ( NFRA ) has debarred CA after finding that he accepted an invalid appointment for auditing Dewan Housing Finance Corporation Limited ( DHFL ) and failed to ensure the quality of the audit.
The authority has issued an order under Section 132(4) of the Companies Act, 2013, which comes after an investigation into Chaturvedi’s conduct during the statutory audit of five branches of DHFL for the financial year 2017-18.
DHFL, a housing finance company listed on the NSE and BSE, was implicated in a financial fraud scandal. NFRA’s investigation revealed significant lapses in the audit processes by various branch auditors, including CA Kashinath Chaturvedi.
The NFRA Panel of Chairperson Dr. Ajay Bhushan Prasad Pandey, Full-Time Members Dr. Praveen Kumar Tiwari and Smita Jhingran had stated that the CA accepted an audit appointment without ensuring that the appointment was approved by the Annual General Meeting ( AGM ) of DHFL, violating Sections 139 and 140 of the Companies Act, 2013.
The order further noted that both CA and his Audit Firm failed to comply with the Standards on Auditing ( SAs ), raising concerns about the quality and integrity of their audit work.
The major lapses stated in the NFRA order are as follows:
The NFRA authority imposed a monetary penalty of Rs. 1 lakh on CA. He was also debarred for one year from acting as an auditor or internal auditor or from undertaking any Audit of financial statements or Internal audit of any company or body corporate.
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