NFRA penalises auditor for lapses in audit of Nicco Uco Alliance Credit
New Delhi, June 13, 2023
The National Financial Reporting Authority (NFRA) has imposed a penalty of Rs 1 lakh on Gautam Guha for alleged professional misconduct in connection with the audit of Nicco Uco Alliance Credit Ltd for the financial year 2015-16.
In its order, NFRA levied a fine of Rs 1 lakh on the auditor Gautam Guha, a partner of G. Basu & Co. The regulator received information from corporate affairs ministry regarding irregularities in the financial statements of Nicco for FY 2015-16, by the Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI).
Accordingly, an investigation was initiated by NFRA for professional misconduct by Guha in the audit of Nicco.
The regulator found several deficiencies in the accounts of Nicco such as non-reporting of foreign currency liability of Rs 11.83 crore at the closing rates as on the dates of financial statements of FY15 and FY16 which was in non-compliance of the accounting standards.
"Showing assets given on finance lease of Rs 1.81 crore even though the lease agreements had become null and void and the assets had turned into NPA and not showing several items as per the Companies Act.
"Guha made references to the Companies Act, 1956, in place of Companies Act, 2013 which was the applicable law, showing two different values of Earning Per Share (EPS) in the same financial statements and made other omissions in the notes to the financial statements", NFRA said in the order passed on Monday.
These omissions and commissions have not been duly reported by Engagement Partner (Gautam Guha) in the Independent Auditor's Report.
Therefore, the order established that the EP failed to report Nicco's non-compliance with accounting standards as well as with the format of financial statements prescribed by the Companies Act, 2013, and that he did not comply with Standards on Auditing (SA) relevant to the audit of the company, the regulator added.
[Press Trust of India]
