Taxmann's Analysis | Key Observations from NFRA Order for Professional Misconduct

Key Observations from NFRA Order against Engagement Partner for Professional Misconduct

Turn static files into dynamic content formats.

Taxmann's Analysis | Key Observations from NFRA Order for Professional Misconduct

Published on Jun 28, 2023

The National Financial Reporting Authority (NFRA) has censured an Institute of Chartered Accountants of India (ICAI) member for negligence and misconduct. Key points: • Violation of AS 11 – The company didn't recalculate its foreign loan with the closing rate, keeping the book value instead • Non-disclosure of Impacts – The auditor didn't think the unadjusted foreign loan mattered, so didn't disclose it. NFRA found no workpapers showing how this decision was reached • Incorrect Lease Accounting – The firm treated unpaid lease receivables as fixed assets, ignoring AS 19 rules • Missing Depreciation Information – Adjustments, additions, or deductions in the gross block and depreciation for the previous year were not disclosed • Non-disclosure of Outstanding Receivables – Trade receivables outstanding over six months weren't disclosed, breaching Schedule III The issues, noted by NFRA in its 12.06.2023 order, demonstrate the auditor's severe lack of due diligence.

Issuu converts static files into:

and more. Sign up and create your flipbook.

Taxmann's Analysis | Key Observations from NFRA Order for Professional Misconduct by Taxmann - Issuu