New Delhi, The National Financial Reporting Authority (NFRA) has imposed a penalty of Rs 5 lakh on an audit firm for professional misconduct and other lapses in the audit of Vikas WSP Ltd for FY2020.
Vikas WSP Limited is a BSE- and NSE-listed company.
The order came after NFRA received information from the Securities Exchange Board of India (SEBI) that Vikas WSP Ltd did not recognize interest expense on borrowings from banks in its financial statements for FY 2020, resulting in overstatement of profits by the company. -It has been told in detail.
Subsequently, NFRA initiated action against the audit firm (S Prakash Agarwal Company) for professional or other misconduct in the statutory audit of Vikas WS Limited (VWL) for FY 2020.
The regulator noted that VWL's financial statements were misrepresented due to partial recognition of interest cost on borrowings classified as non-performing assets (NPAs) by banks in FY2020, resulting in inflated profits. ."The audit firm primarily responsible for establishing and maintaining a system of quality control that ensures that the firm and its employees comply with professional standards and regulatory and legal requirements.
"Further, the report issued by the firm or the engagement partners, as appropriate in the circumstances, has failed to properly implement its quality control policy and procedures," NFRA said in the order on Tuesday.
Accordingly, the regulator penalized the audit firm for audit lapses.
It said, "The audit firm failed to meet the relevant requirements of the Companies Act Standards on Quality Control (SQC 12), the Standards on Auditing in a number of material respects and was grossly negligent in applying professional skepticism and due diligence to the audit." Failed." .
Vikas WSP Limited is a BSE- and NSE-listed company.
The order came after NFRA received information from the Securities Exchange Board of India (SEBI) that Vikas WSP Ltd did not recognize interest expense on borrowings from banks in its financial statements for FY 2020, resulting in overstatement of profits by the company. -It has been told in detail.
Subsequently, NFRA initiated action against the audit firm (S Prakash Agarwal Company) for professional or other misconduct in the statutory audit of Vikas WS Limited (VWL) for FY 2020.
The regulator noted that VWL's financial statements were misrepresented due to partial recognition of interest cost on borrowings classified as non-performing assets (NPAs) by banks in FY2020, resulting in inflated profits. ."The audit firm primarily responsible for establishing and maintaining a system of quality control that ensures that the firm and its employees comply with professional standards and regulatory and legal requirements.
"Further, the report issued by the firm or the engagement partners, as appropriate in the circumstances, has failed to properly implement its quality control policy and procedures," NFRA said in the order on Tuesday.
Accordingly, the regulator penalized the audit firm for audit lapses.
It said, "The audit firm failed to meet the relevant requirements of the Companies Act Standards on Quality Control (SQC 12), the Standards on Auditing in a number of material respects and was grossly negligent in applying professional skepticism and due diligence to the audit." Failed." .
