NFRA debars CA for Five year with 5 Lakhs Penalty for Audit Lapses
The National Financial Reporting Authority in the matter of CA Shyam Malpani debarred Chartered Accounts for five years with Rs. 5 lakh penalty for audit lapses.
Relevant Text of the Order:
NFRA‘s investigations inter alia disclosed that CA Shyam Malpani – the SKNL’s Auditor for the FY 2013-14 failed to meet the relevant requirements of the Standards on Auditing (‘SA’ hereafter); provisions of the Companies Act 2013 and the Companies Act 1956. He also demonstrated serious lapses and absence of due diligence. One of the lapses was that he accepted the Audit Engagement of SKNL for FY 2013-14 despite owning the shares of SKNL through a company which was wholly owned by him and his family members and thereby violated applicable Laws and Standards relating to conflict of interest and independence. Further, he had issued Qualified Audit Opinions on Standalone Financial Statements (‘SFS’ hereafter) and Consolidated Financial Statements (‘CFS’ hereafter) with eleven (SFS) and fifteen (CFS) qualifications respectively despite the fact that the nature and effect of qualifications in the Independent Auditor’s Reports…
