Auditor Penalized Rs. 5 Lakh for Professional Misconduct and Negligence in Fraud Reporting and Auditing Standards.

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Auditor Penalized Rs. 5 Lakh for Professional Misconduct and Negligence in Fraud Reporting and Auditing Standards.

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....The National Financial Reporting Authority (NFRA) held that the auditor committed professional misconduct u/s 132(4) of the Companies Act, 2013 and Section 22 of the Chartered Accountants Act, 1949. The auditor displayed gross negligence in relation to obligations to report fraud u/s 143(12) of the Companies Act, 2013 and SA 240. The auditor failed to exercise due diligence, challenge valuation assumptions, independently assess impairment requirements, maintain adequate audit documentation, and comply with Ind AS 16. Despite issuing a Disclaimer of Opinion, the auditor inadequately addressed risks related to fraud and disclosure requirements. Considering the nature of violations and principles of proportionality and deterrence, NFRA imposed a monetary penalty of Rs. 5,00,000/- on the auditor u/s 132(4)(c) of the Companies Act, 2013.....

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Auditor Penalized Rs. 5 Lakh for Professional Misconduct and Negligence in Fraud Reporting and Auditing Standards.