Chartered Accountant Faces Dual Sanctions From NFRA Over Same Company Audit
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- By Taxmann
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- Last Updated on 10 September, 2024
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1. Introduction
The Chartered Accountant who was previously sanctioned by National Financial Reporting Authority (NFRA) through its order dated 13th April 2023 and 25th April 2023 for the deficiencies in the conduct of audit is penalized once again. In its recent order dated 6th September 2024, the NFRA found the same Chartered Accountant guilty for misrepresentation of facts during its proceedings, marking another disciplinary action.
2. NFRA’s Observation
The NFRA in its Show Cause Notice (SCN) asked the auditor to submit the information, including details of both audit and non-audit revenue earned by the firm from the auditee company. On response to the NFRA’s Show Cause Notice (SCN), the auditor disclosed revenue earned from one related party.
Later on, the NFRA discovered that the firm had conducted statutory audits for four additional entities related to the auditee company but failed to disclose the revenue earned from these engagements. Hence, NFRA held the firm guilty of professional misconduct for misrepresenting the facts during the proceedings.
3. Double Jeopardy
Further, the Chartered Accountant stated that that the NFRA has already taken action against her in its previous order. Therefore, a new charge of professional misconduct for the same audit amounts to “Double Jeopardy”.
To understand the NFRA’s order in detail and know whether the sanction of dual penalty on Chartered Accountant over the audit of same company leads to double jeopardy.
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