The National Financial Reporting Authority (NFRA) has slapped penalties totalling Rs 4.5 crore on an audit firm and two auditors for professional misconduct for alleged auditing lapses of Reliance Capital’s financials in 2018-19.
A fine of Rs 3 crore has been imposed on Pathak H D & Associates, Rs 1 crore on Parimal Kumar Jha and Rs 50 lakh on Vishal D Shah. Besides, Jha and Shah have been debarred from taking up audit work for 10 years and 5 years, respectively, according to an order.
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Jha was the Engagement Partner (EP) and Shah was the Engagement Quality Control Review (EQCR) Partner for the statutory audit of Reliance Capital for 2018-19 fiscal.
For 2018-19, the company was jointly audited by Price Waterhouse & Co LLP (PW) and Pathak HD & Associates. PW reported suspected fraud regarding loans and investments amounting to approximately Rs 12,571 crore to some group companies.
In the order dated April 12, the NFRA said that despite the reporting of suspected fraud and the resignation by the other joint auditor (PW), the auditors did not perform adequate procedures as required by the Standards of Auditing (SA).
“The material misstatements in…
